When you entered the business, did you ever think clients would hire advisors on the basis of a CARFAX-like profile? Amazingly, it’s happening now. Are you ready?
Clearly, transparency’s time has come. First, the rise of the Web 2.0 has made the Internet incredibly interactive. Result: Consumers now publish their every opinion online, fueling the rise of review sites like Yelp and Angie’s List.
Second, the advent of social media platforms like Facebook
allows those opinions to replicate virally with incredible speed.
Third, the 2008 economic crisis pummeled consumer trust of financial advisors and institutions. Consumers today are unwilling to trust without verifying. They need to verify advisor claims using third-party sources. And if advisors don’t check out, then they can just, well, check out.
Now, I’m not suggesting consumer due diligence is a new phenomenon. Of course it isn’t. For years, they’ve used FINRA’s BrokerCheck service. They also call state regulators to confirm licenses and disciplinary status, and check advisor complaint histories with the Better Business Bureau. However, these methods have been clunky at best.
No longer. Consumers can now access third-party websites
to see how advisors really operate. And these sites don’t just rely on an advisor’s voluntary disclosures. At least one aggregates regulatory filings so consumers can view even damaging information.
Case in point: Brightscope. Last spring, this financial data provider launched its “Advisor Pages.” Based on aggregated SEC data, each
advisor profile includes services provided, assets under management, client types, experience/employment history, licenses, disciplinary actions, advisor exams passed, compensation arrangements and professional designations. The page also provides links to consumer questions that advisors have answered, as well as the advisor’s own social media links.
Although Brightscope has generated controversy — some advisors question its data integrity and pricing — it has shown that transparency is here to stay in financial services. And Brightscope is far from the only player. The Paladin Registry, Financial Advice Network, Financial
Joe, and my own firm, the National Ethics Association, offer various approaches to Web-enabled reputation marketing.
So what’s my takeaway?
First, don’t even think about fighting the transparency trend.
Consumers have tasted true power, and they will never relinquish it. Instead, help them wield that power responsibly.
Second, take transparency seriously.
Make it your business to share extensive information with prospects and clients. The more data — both positive and negative — that you can share, the more trust you’ll generate
Third, control your message.
Sure, use third-party websites, but also make sure your own site is the ultimate source of information about the real you. In my next month, we’ll discuss how to make your website “Transparency Central.”