Serving the web-savvy

The impending transfer of wealth from baby boomers to the self-serve generation presents a potential hurdle for financial advisors in the near future. The Internet is rife with information about how to reduce costs on a portfolio by firing one’s advisor and doing it yourself with index funds or ETFs.

And while that message might not be loud enough for the boomers to hear, much of their wealth will be shifting to investors who do hear that message.

Unless everyone suddenly became committed to a lifetime of education on financial matters, a world without advisors would be a mess. The average DIY investor has proven highly skilled at doing him or herself a disservice. More importantly, few Canadians have the desire, or time, to teach themselves about managing their finances. It’s this group that turns to, and relies upon, quality advice.

The bad news is this will likely change as information and service options become more accessible electronically. But every challenge produces an opportunity— in this case the ability to embrace the medium to which the next generation of investors is turning and use it to your advantage.

For my part, I started a blog in 2007 because I liked talking about investments and financial planning strategies to whomever would listen. It’s since turned into something much bigger. I’m beginning to realize that if used properly, a blog can eventually become the cornerstone of an advisor’s marketing and client servicing in the future.

What’s a Blog? Short for Web-log, a blog is a cross between a soapbox, an educational forum and a diary. What makes a blog different from a traditional static Web site is that it’s constantly updated and lets readers interact.

There are reportedly more than 112 million blogs on the Internet. My own blog, www.WhereDoesAllMy- MoneyGo.com, receives more than 10,000 unique visits per month, and reaches 500 regular readers who subscribe to free updates.

One of the main utilities of having a blog is that over time, my investment philosophy, knowledge, and approach to financial planning have gradually diffused to interested readers and prospective clients. So, if someone contacts me after having read about me online, I don’t have to spend any time qualifying myself—it’s straight to business.

Knowing Boundaries I have always consciously tried to keep my blog and work Web site separate. It’s no secret to my blog readers that I’m a financial advisor, but there’s never an agenda to get them to become clients. My belief is that if they come across my site and realize they need the help of an advisor, they’ll seek out my work site and get more information.

Besides, it’s not the loyal blog readers who normally become clients. For the most part the regular readers are either self-empowered do-it-yourself investors or other financial advisors who are curious about what their colleagues are up to. So, the business-building utility of the blog is for the nonregular readers.

The Right Audience To capitalize on the goodwill you’ll hopefully generate by maintaining a good blog, you need to make it easy for prospective clients to engage with you once they do make their way over to your work Web site. Some good devices I use include contact request forms, e-newsletter sign-up forms, and a new 15-question, one-minute checkup.

The e-newsletter takes advantage of the newer technology as well. For example, if I create a newsletter with two different sections, perhaps one on lastminute RRSP tips and another on a life insurance strategy, I can carefully monitor the performance of the newsletter if I use the recently introduced e-mail tracking capabilities.

And, I can see exactly who opened the newsletter, at what time, and how many times the person took a peek. This allows me to gauge who is, or isn’t, part of my active audience. I can also see which items they read, and when they read them. Since I can monitor this in real time, I make a point of watching user activity closely for the first couple of days after the newsletter is sent out.

If someone clicks on the insurance article, an auto-generated report provides the phone number of the prospect. Then, when I pick up the phone, I know the conversation needs to focus on insurance concepts. The only cost involved: five cents per user each time I send out a newsletter. Compare this to a regular newsletter delivered by snailmail— the e-mail option is 90% cheaper and the ability to focus exclusively on the hot prospects (because you know they actively read your newsletter), on topic areas in which you already know they’re interested (because it’s what they clicked on), and right after they read it (because you get reports on exactly when they read the newsletter) is almost priceless.

Next Generation Service I never worry about losing these clients to a competing advisor because I’m in constant contact, discussing ideas all the time. It would be pretty rare for someone to approach my clients with a concept that hasn’t already been mentioned on the blog. I’m also confident the clients will give me a chance to respond or critique any proposed alternatives because of the trust we’ve built.

Better still, clients who read the blog are phenomenal from a practice management perspective. I regularly discuss studies and research that I feel might help them better understand their investments and become more astute. For example, I referenced one of the DALBAR studies, which showed that over long periods of time the average mutual fund investor might severely underperform simply because he or she keeps switching funds based on emotion and short-term performance. By having this discussion proactively on the blog, these clients are less likely to fall into the trap. Further, they’re less likely to second-guess the advice when it’s provided before it needs to be addressed.

When it’s time for an annual faceto- face review meeting, all that’s left to do is review the financial plan and then socialize—there’s no handholding required because they’re intimately acquainted with my investing theories.

I’m only now beginning to realize the potential for this new medium. Clearly the proof will be in the pudding, and it’s up to me to leverage technology into new business. I’ve created a specific action plan to do just that. It includes actively marketing informational seminars through the blog and generating referrals by asking readers and clients to forward interesting articles to their friends and families. I’m eager to see how this will pan out.

I’ve also created an "instant online checkup" with the expressed purpose of providing both clients and casual readers an easy, non-confrontational way to provide referrals. I just ask them to forward the checkup link to friends and family members. If any of them fill it out, I have their phone numbers, and all the areas of financial planning that require attention are e-mailed to me instantly. This has already yielded meetings with six- and seven-figure prospects.

Recently, I’ve also started experimenting with video blogging, as it seemed a logical next step to add a video market commentary to client newsletters. It’s a good added touch for my tech-generation client base. And finally, I’ve also tried "screencasting" which is simply a video that captures what you do on your computer with voice-over added. My first attempt at a screencast was a tutorial on how to use Google Finance to look up stock quotes. Viewers could watch a video capture of whatever appeared on my screen as I looked up a stock quote, and they could hear me narrating and explaining what I was doing as the process went along.

So, make no mistake, future investors will be much more informed and technologically engaged. Advisors who ignore the power of the Internet will be in for a rude awakening.