Financial advisors spent decades lagging behind other professions when it came to adopting technology to drive client engagement. But all that changed in 2020, when they had no choice after the pandemic arrived.
“Until recently, there was a lot of inertia to overcome,” says Dave Christensen, chief product officer for FMG Suite, a digital marketing automation, website and relationship management platform for advisors. “Now there’s a lot of training and a lot to teach advisors. Necessity is the mother of invention. When the pandemic struck, inertia broke free, and the industry just had to go digital and remote.”
FMG Suite saw a fivefold increase in advisor engagement with its products last year. Whereas advisors previously viewed many digital tools, especially marketing tools, as simply “nice to have,” they came to rely on them completely as most people were forced to work from home.
In March, in-person events “disappeared,” Christensen explains. That meant that events in general weren’t happening. Then, during the summer, they returned.
“More events are being held today than were being held before the pandemic, but almost all of them are now digital,” he says. “People have shifted to being very comfortable in front of a camera and a screen, and that’s exciting to see because their activity can now be tracked, and their content becomes reusable.”
Even though the world is gradually getting vaccinated against Covid-19, some of 2020’s changes represent a “new normal,” Christensen says. In particular, he says, these five technology-related trends will continue to impact advisor-client engagements:
1. Traditional client interactions are dead.
“Advisors who did all their work one-on-one and face-to-face are quickly playing catch-up to digital natives and early adopters,” Christensen says. “When the pandemic struck, they didn’t have the right tools in place, but they scrambled in the aftermath—and that’s when we saw our sales and our growth explode.”
Clients, too, have become comfortable with digital interaction, which gives advisors the opportunity to connect in new ways, such as podcasting and video blogging.
Advisors are also interacting with centers of influence through digital means, and sharing space on blogs, podcasts and videos with CPAs and attorneys. This permits an advisor to act as a subject matter expert on the other professional’s digital media.
Referrals are also moving to digital. “We’re seeing more e-mails, timely communications and video blogs being shared from one person to another,” he says. “You’re no longer building the primary relationship on the golf course, at a football game or over dinner. Introductions are happening more personally, but digitally.”
The shift toward more digital and multimedia interactions has some interesting quirks. For example, FMG Suite introduced an online chat program (in addition to phone and in-person customer service), thinking it would reduce the number of service calls the company received and enable the firm to reallocate staff away from its phones.
But that didn’t happen. Instead, overall interactions with clients increased, and FMG Suite had to hire more staff to handle chat and phone support. “Investors will want a relationship, but they also like being served digitally and in a higher-touch manner, and they’ll want it to continue,” he says.
2. Advisors with the most “digital real estate” will win.
“Advisors with the best digital footprint are really going to win clients in the future,” Christensen says. “This is now often your first impression of any business you’re thinking about working with. Now more than ever, the way advisors present themselves on web properties matters. It’s their primary interaction.”
Advisors should expect clients to judge them on how they compose e-mails, create videos and interact in videoconferences. If they offer clients and prospects a painful digital experience, prospects will likely look elsewhere.