Here’s What Prospective Clients Care About More Than Anything Else – Episode 31
What do the affluent really look for in a financial advisor? If you knew the answer to that question, you could focus your prospecting and marketing efforts on the areas that really matter—and attract more than your fair share of new wealthy clients.
The good news: We surveyed some 1,500 investors—the majority of whom have at least $1 million dollars of net worth—and they revealed that factors that are most important to them when choosing a new financial advisor.
KEY TAKEAWAYS
- Certain factors matter very little when prospects evaluate a new advisor—such as social media usage and non-traditional investment offerings.
- Advisors’ track record matters—but not nearly as much as you might think.
- Focus on the prospect to demonstrate your trustworthiness.
FACE THE FACTS
For starters, we learned that several factors were relatively unimportant in their decision whether to work with a new advisor. For example:
- Strong use of social media. Fewer than 1% of the affluent base their decision mainly on an advisor’s use of social media outlets and resources. This was the case whether the survey participant was a millennial, a gen x-er, a baby boomer or a member of the WWII generation.
- Non-traditional investment options. Likewise, fewer than 1% said the most important factor was whether the advisor offered non-traditional investment offerings.
We also discovered factors that were very important, but only to a relatively small group of affluent clients. Some examples:
- Recommendation from a trusted source. 14.6% of affluent investors said the most important factor in their decision was that the advisor be recommended to them by someone they trust. That said, millennials are far less likely than other age brackets to focus on this characteristic: Just 3.3% of that group called this the most important factor.
- Advisors’ investment track record. It might surprise some advisors to learn that just 11.7% of the affluent we surveyed said that investment performance was the key factor in whether they chose to work with a new advisor.
Finally, we landed on the biggest, most important factor that the affluent consider when choosing an advisor: The sense that the advisor is trustworthy and honest—cited by 52.1% of the affluent.
What’s more, trustworthiness/honesty was the most important factor across all age demographic groups.
INSIGHTS INTO ACTION
Does these findings mean you shouldn’t be on social media or bother to offer non-traditional investments? Not at all! Just don’t expect those moves to do much to attract new affluent clients to your door.
Cleary, the key to success—at least, according to the affluent themselves—is to demonstrate your honesty and trustworthiness right off the bat. Some ways to do exactly that:
- Focus on the prospect, not yourself. Advisors commonly spent the bulk of their initial meeting with prospects talking about themselves—their firms, their skills and their resources. Instead, make the initial meeting all about the prospect. Ask lots of questions about the person’s goals, challenges, preferences and so on—and then listen carefully to what they say. When you do speak, make sure what you say directly relates to the information you just heard.
- Get prospects through referrals. As noted, trusted referrals are often an important factor in prospects’ decision-making process. Seek out referrals from high-value clients as well as COIs your work with, such as accountants. If a prospect has been told by someone they trust that you are honest, that prospect is likely to come into the initial meeting predisposed to liking you.
- Be transparent. Tell the prospect how you get paid, how your fees work and why, and any affiliations or partnerships that are key parts of your business.
The upshot: Focus on showing how trustworthy you are, from the first interaction with a new prospect, and you’ll position yourself to show the affluent that you can give them what matters most.
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