While client referrals are still the primary source of new business for advisors, prospects are turning to social media to conduct research about advisors before meeting or to validate their decision afterwards. This trend spans generations.
A recent study called ‘Financial Professionals and the Future of Thought Leadership and Social Media’ conducted by Financial Planning Association (FPA) and LinkedIn reveals that prospects prefer doing online research on financial advisors with the help of search engines like Google before hiring their services.
This online study was done in USA which surveyed 1,242 financial advisors and 1,041 investors who are using services of IFAs. The survey provides insights into how clients are using internet and approaching their finances. Though the research was carried out in USA, it provides relevant insights for Indian advisors.
The research shows that 77% respondents across all age groups do research on search engines about advisors prior to meeting them. Of these, 35% prospects are in the age group of 18-44. The report said, “Younger prospective clients (under age 44) were about four times as likely to use online searches or professional or social networks to learn about their advisor prior to contacting or meeting with him or her.”
Apart from Google, an increasing number of investors are using search tab on professional networks like LinkedIn and social media like Facebook, Twitter to research on advisors. While 44% of respondents use professional networks to know about advisors, 25% prefer researching on social media sites.
Another interesting finding from this report is that older clients are more likely to use professional networks to validate their thinking after meeting an advisor. Almost all older respondents said that they do an online due diligence of advisors post their meeting.
Also, a few respondents said that they do a research on advisor after the meeting but prior to making any investment decision.
To conclude, the study underpins the need for advisors to have some kind of online presence (LinkedIn, Facebook, company website, etc.) which can help establish their credibility.
