Is our industry on the cusp of change? I think it’s clear that change is happening – and that many financial advisors will be challenged to maintain the status quo. The threat from robo-advisors alone is enough to potentially disrupt our industry.

But I also think our industry – and individual advisors – can address these challenges head on and prosper. One of the most effective weapons at our disposal is the one that no robo-advisor can touch: human trust.

Your competitive advantage

While there are many elements to being a top advisor, the one element that encapsulates all others is trust. 

There needs to a base level of trust before someone will meet you, agree to work with you, and give you their business. Trust doesn’t come from a cool online presence, or local sponsorships, or mailings and calls – although these all can help.

Trust comes from three things that, when delivered conveniently and when the client is ready, can form the basis for creating a client for life.

  1. Expertise: People need to feel confident that you have expertise in the areas in which you’re helping them. This will be based on a combination of experience and credentials. And while we may want to help in all areas of a client’s financial life, it’s counter-productive to be all things to all people, because none of us are expert in everything. Be clear about what you can and cannot do.
  2. Customization: No one wants to be sold a product or a concept that you pitch to everyone. Clients want to know that you’ve taken the time to get to know them – and eventually propose a set of recommendations that are personalized to them. While there will be overlap in products and recommendations for different clients, personalizing your recommendations to the individual client is important from a trust perspective.
  3. Results: Over time, your results will speak for themselves. On the investment side, has a client’s average level of return and volatility been consistent with expectations? On the insurance side, is a client’s anxiety (and risk) level lower than it was at the start?  If the proper insurance is in place, it will be.


Disruption is coming – focus on building trust

I know many in our industry felt that commission disclosure and CRM2 would be a significant disruptor of our industry. While the fear of this happening was both real and uncomfortable, I don’t believe it hurt most advisors on the mutual fund side when it became a reality. At least, not yet.

But the aggressive nature of marketing campaigns by robo-advisors about value for money will result in change over time, and advisors who don’t build trust and actively demonstrate their value will face challenges. Trusted financial advisors will continue to thrive into the future, provided they continue to offer the expertise, advice and service that robo-firms can’t match. It’s the advisors who don’t currently operate at this high level who are in danger.

Embrace change – grow your business

It’s time for all good advisors to express their why, how and what so that when Canadians seek a human advisor, they will love what they see and welcome the relationship. If you’re doing all the right things to create trust and a great client experience, disruption can’t touch you. Make it happen, and watch your business grow.

The bright, disrupted future

We too often think of disruption as a negative, but in a broader context, it will be a huge positive for our industry. With positive disruption – one that decreases pain points and increases trust – the future is bright:

  • More Canadians will choose the right advice channel for them – including robo-advice where appropriate  
  • More Canadians will know how and when they can benefit from working with a human advisor
  • Financial advisors will be viewed as trusted professionals, even by lawyers and accountants
  • More advisors will articulate their unique value proposition
  • More advisors will act like business owners, instead of salespeople.

It means that more Canadians will seek out advice, families will have greater peace of mind, wealth will be grown and protected, and advisors and product manufacturers will be more successful.