Date: January 12, 2016

How to Attract Today’s Investor – Infographic

Every RIA in America is watching the development of Robo and Virtual Advisor business models. They want to know how investor perceptions are changing and whether they should offer Robo and Virtual services to their clients.

Paladin surveyed over 1600 investors in November 2015 to obtain some answers. 9% responded to the survey (153). Here are our findings.

The investors who responded to this survey had the following characteristics:

  • Median age: 46
  • Median Invested Assets: $480,000
  • % Over $1 Million of Assets: 21%
  • Advisor Services (Utilization Rate): Investment (80%), Planning (73%), Insurance (32%), Tax (44%), Legal (19%)
  • Source: Investors who used Paladin Registry to find and select vetted financial advisors with quality ratings

Current Advisors

We asked investors to describe their types of relationships with current advisors.  The most telling statistic is that 43% of investors would not limit their choices to Traditional Advisors. 

Advisor Location 

Advisor location in relation to prospects and clients is another important variable. Traditional advisors limit clients to a particular radius from their offices. Virtual advisors can provide services to investors in any location where they are licensed – same state, contiguous states, or states in same time zone are best.

When given a choice between selecting the most competent advisor versus the closest advisor and astounding 94% said they wanted to select the advisor with the best credentials.

There are two takeaways for this statistic.

  1. Virtual Advisors will have to compete with competent, local Traditional Advisors.
  2. Virtual Advisors will need an effective digital marketing strategy that validates their competence and trustworthiness.

Investor Communications 

Communication is the key to building successful relationships with local and remote investors.

Our surveys show investors are increasingly open to electronic communications.   

For example, we asked investors if they would consider advisors who serviced clients by telephone, Internet, or Skype: 42% said Yes, 14% said No, and 44% said Perhaps.

In the future, advisors will have to provide increasingly clear descriptions for the ways they will communicate with prospects and their clients.

Investment Expenses

Expanded fiduciary standards means more transparency for expenses. Consequently, more investors will know the combined expenses they are paying for financial advice and services. Plus, it will be much easier to compare services and prices in the future.

It should be no surprise that 77% of investors said expenses were very important. The other 23% said expenses were somewhat important. No one said expenses were not important even if they had high performance expectations.

Pricing is already a major differentiating characteristic for Traditional and Robo advisors. It is yet to emerge as a significant differentiator for Traditional and Virtual Advisors.   

Digital Marketing 

The data prove investors are no longer limiting their selections to Traditional Advisors. They are open to new services, new ways to communicate with advisors, increased transparency, and reduced expenses.

Every advisor in America already provides virtual services to existing clients. For example, a current client relocates to another state, but retains the advisor for financial advice and services. That is a virtual servicing relationship.

The real challenge emerges when Traditional Advisors want to market themselves as Virtual Advisors. They will need a virtual marketing strategy to win in the Digital world.

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Jack Waymire

Jack spent 20 years in the financial services industry before joining Paladin as its Chief Marketing Officer in 2004. Jack is the author of two best selling books including Who’s Watching Your Money? and 5 Steps for Selecting the Best Financial Advisor. He provides consulting services and writes website content, blog articles, pillar pages, and eBooks for Paladin and a select clientele.