Clients Increasingly Demand More In-Depth Analysis and Insights; Financial Advisors Can Stand Out by Meeting This Rising Need
I’ve dedicated my professional life to establishing and enhancing brands, having worked for and with a range of firms, marketing teams and individual financial advisors. In the end, much of this work has been about helping people differentiate themselves and stand out.
I recently had a conversation with a financial advisor friend that underscores how important this will continue to be and what form it could take. She told me that when she switched to a new firm about ten years ago, she chose one with minimal overhead, saying it was an easy decision because it allowed her to keep more of what she earned.
At the time, she distinctly remembers thinking that having access to extra bells and whistles like research was a needless extravagance, believing that during times of distress all clients needed was some old-fashioned hand-holding and a few reassurances.
That was then. This is now.
All the changes in the world over the last year or so have her clients increasingly demanding more knowledge and insight into not only what is happening but why it’s happening. So, suffice to say, she no longer considers research “needless.”
She’s not alone. Many financial advisors have undergone a similar awakening, giving greater scrutiny to how they do business and present themselves to the market. Indeed, speaking confidently about an idea or trend, linking that idea to how it may benefit a client and then highlighting the level of due diligence involved when selecting a manager is a key differentiator in today’s environment.
Because of this, attitudes toward having access to intellectual capital-based services like research have begun to shift. With this in mind, here’s the bare minimum of what wealth management firms should be delivering to their advisors in this area.
- Macroeconomic research that recognizes a post-pandemic world in transition. With clients becoming more conscious of the issues shaping the global investment landscape, you must have a point of view. Anyone can parrot monthly job numbers, quarterly GDP estimates, inflation readings or other important economic data. The real value is putting that information in perspective and explaining to clients why these figures impact them and their families. Could many advisors do that by themselves? Likely. But for many others, it would help to have access to thought leadership that allows them to do that. In the current economic environment, advisors may field questions that even 15 months ago would have been unheard of, like why China’s support for state-backed enterprises will impact some of their investments in U.S.-based companies. If an advisor can’t intelligently address an issue like that, a client may start to look around for someone who can.
- Focused thought leadership and empirical analyses. For advisors, there is no such thing as being too informed. That’s why firms should always try to go beyond macroeconomic research and empower them with insights about a broad spectrum of industries and sub-sectors. What is the future of eco-friendly and self-driving vehicles? Will the urban real estate market tilt more residential or commercial in the coming years? How will public policy impact remote work? These are examples of some of the questions clients could have, and advisors will need answers.
- Turnkey communications materials demonstrating a powerful “brain trust” is backing them. Such materials should exploit the in-house experience and expertise of investment banking and asset management experts at the firm. That includes everything from podcasts to blogs (or vlogs) about financial planning issues, as well as thought-leadership articles that spotlight specific capabilities offered by the firm or companies covered by the firm’s analysts. In the absence of this type of rich content, an advisor may appear “on an island” to clients, perhaps prompting them to seek someone who will provide those types of resources.
The noted British historian Arnold Toynbee believed that the rise and fall of civilizations could be explained by how well their leaders responded to challenges. If, in the face of threats, they came up with a creative solution to combat them, their societies often changed for the better. When they failed to do that, however, the outcome was usually dire.
The pandemic could end up being our Toynbee challenge. Clients have become more reflective and inquisitive, increasingly asking questions that transcend returns and saving for retirement, including whether they are investing in ways that make the world a better place. At the same time, they have never been more mindful of how domestic and global economic trends shape the investment landscape.
With clients increasingly demanding highly technical conversations that shed light on big-picture issues, how financial advisors differentiate themselves in an environment like this will be crucial – all of which means that having the best intellectual capital-based resources is both a service and brand advantage.
Joan Khoury is Managing Director and Chief Marketing Officer at Oppenheimer & Co. Inc