Investors determine trustworthiness of advisors based on information found on internet.
Around 24% of investors use internet to check the credibility of financial advisors, shows a study published by Paladin Registry, an American advisor’s information services company. The research shows that investors determine advisor trustworthiness based on information about financial advisors they found on internet.
Although the study was conducted in US, the findings are of relevance to Indian advisors. The study gives interesting insights into the way investors reach clients, their psychology and expectations.
The research shows that in today’s world clients are not acquired by traditional marketing techniques like cold calling or seminars. Instead, a strong online presence of IFAs can be of great help.
Of the 386 respondents, 75% investors said that internet enabled them to find and do research on financial advisors while maintaining their anonymity. In an email conversation with Cafemutual, Jack Waymire, Founder & Author at Paladin Research & Registry stressed the need to have a top quality website for financial advisors. He advised IFAs to put a lot of articles on their site and practice in full transparency. Waymire suggested that IFAs should put ratings and reviews in their website to increase their visibility.
The study says that most clients got their financial advisors through word-of-mouth-influence like referrals from family and friends and associates. Thus, everything boils down to trust. Trust is established by getting to know a person on a personal level. “The best referrals come from satisfied clients. The second best source is referrals from other professionals (CPAs, attorneys). Advisors should have a process for asking referrals,” said Waymire.
Also, developing personal relationship with both spouses of a family increases client loyalty and increases their willingness to provide personal introductions to their friends and colleagues.
Interestingly,
the study found that 25% of respondents use internet to find financial advisors.
Thus, a good website has a major impact on client’s decision making process.
