“Disruption” is the buzzword of our time, and for good reason: so many businesses have faced it. Apple disrupted the way people interact with technology. Twitter disrupted the way people communicate and news is shared. Uber disrupted the taxi industry. The list goes on.
While it may seem like technology is driving this change, it’s really people’s needs doing the driving. Technology is the great enabler, but the true genius of successful disrupters is identifying the pain points in the customer experience and creating a solution to overcome it.
Are there pain points and trust issues for people seeking advice relating to investments, insurance or financial planning? You bet. Consider these:
- Skepticism due in part to the gap in financial literacy. I see a wide financial literacy gap – and people who are skeptical of advice and advisors, and fearful of being “taken.”
- Lack of understanding of the role. It’s been my experience that people don’t know what advisors can do for them, and they also don’t know where to go for help or how to find a top-rated advisor.
- Lack of trust. Canadians are facing a barrage of ads suggesting that advisors are taking away from peoples’ savings – and that the cost of working with an advisor is not worth what they get in return. The impression that’s left? Advisors are salespeople, with the primary goal of lining their own pockets.
Disruption is coming
Disruptors see a specific opportunity – or something lacking in the marketplace – and they take advantage of it. While CRM2 didn’t lead to immediate cash outflows from mutual fund–based practices, it did provide fuel for the robo-advice firms to launch an aggressive campaign that continues to plant doubt in the minds of financial services consumers about value for money.
This applies to the insurance side of our business as well. Insurance is ripe for the kind of disruption that has roiled many other industries, from retailing to travel to banking. Incumbent insurers can’t afford to be complacent. Their customers, especially young, digitally savvy ones, are very open to taking their business to a newcomer.
Moving forward in the age of disruption
Good advisors will embrace change and disruption. Those who don’t could be forced out of the industry. But the good ones will survive and thrive.
One example of change that could be coming soon is the greater use of apps to find qualified advisors [tweet this]. A pain point we hear time and time again is the difficulty people have in finding an advisor, even with more than 100,000 of them in Canada. An app – with ratings – puts the user experience front and center. It’s convenient, easy to use, and helps save time and effort.
The use of ratings may make some advisors uncomfortable. But, ultimately, these ratings will filter out the bad advisors we know are out there – the ones who thwart our efforts to build trust with consumers across our industry.
With the use of apps comes a greater online presence – and one of the best ways for you to prepare for change and disruption is to use this platform to articulate how you add value. Specifically, consider an online profile that clearly explains the following [tweet this]:
- Why you do what you do: Organizational consultant and author Simon Sinek built his career on a simple idea: “start with your why.”1 Explaining why you do what you do links to the part of the brain that controls emotions and decision making. Articulating your why will help you connect to clients. Because, as Sinek states, “People don’t buy what you do, they buy why you do it.”
- Whom you work with: If you don’t work with everyone, in every location, at every income level and life situation, don’t pretend that you do. Potential clients want to see themselves in your profile. So be clear about things like age range, net worth, profession and any niche market that you serve.
- How you work – your process: Remember – people are highly skeptical of our industry because of the perception of a sales focus. You need to highlight the advice focus – which starts with learning, listening, thinking and then advising. Product sales is the result of good advice, so explain the process you follow with clients – from the first meeting through a life-long relationship.
- What services you provide: Top advisors do not do all things for all people. While a top advisor may have experience in several areas, they will refer their clients to others when the need strays outside of these areas. For this reason, advisors who work in a multi-disciplinary firm, or who maintain a reliable network of other trusted advisors, will be in a position to best serve their clients.
Embrace change – grow your business
In the end, it won’t be changes like commission disclosure, online trading platforms or robo-insurance (if it comes) that will disrupt our industry. It will be the failure of advisors to communicate the value they bring and to deliver consistently on that promise. Only then can we address the long-held perception that advisors are salespeople first, and trusted advisors second.