What Can Content Marketing Do For Financial Advisors?

Introduction

It’s no longer news that consumers of today are increasingly tired of being sold to. In 2019, nearly 25.8% of internet users in the United States used an ad blocker, according to Statista.

Consumers don’t want brands to treat them as numbers on a list or dollars on the book, but individuals with actual needs and real existence.

70% of people would rather get information about a company or learning something from an article or blog instead of a traditional ad, according to Demand Metric. Also, 71% of B2B consumers reviewed a blog on their buying journey.

In this new world, businesses now recognize the importance of inbound marketing – a business methodology that attracts customers by creating valuable content and experiences tailored to them (Hubspot).

Businesses now focus on building value-driven relationships with customers by providing content and experiences that meet their needs. As Craig Davis, a sports journalist, puts it, “We need to stop interrupting what people are interested in and be what people are interested in.”

Content marketing is the subset of inbound marketing that caters to the production and promotion of the content that provides value to your target audience by meeting their needs.

Content marketing is not an option in this new reality; it is a must. Seth Godin, a former dot com business executive and marketing guru, said it best, “Content Marketing is all the Marketing that’s left.”

The success of content marketing

As businesses have adjusted to the new normal, they have seen better results.

Content marketing generates 3X more leads per dollar than outbound marketing, even though it costs 62% less, according to Demand Metric.

72% of marketers believe content marketing increases engagement and leads. “Content Marketing provides 4x the ROI of our traditional marketing spend,” said Julie Fleischer, a strategic advisor at Encantos.

The big question is whether the success of content marketing translates to the financial advisory business.

Is content marketing a good investment for financial advisors, or should you focus solely on the power of referral?

With thousands (if not millions) of outlets offering financial information and education, is content marketing a worthy investment for financial advisors?

The top problems financial advisors face

An excellent way to answer that question is to consider some of the problems financial advisors face and if content marketing will provide any good solution.

Last year, CNBC interviewed financial advisors who work in some of the FA 100 wealth management firms. They wanted to know some of the challenges and changes they foresee moving into the future.

Below are four challenges financial advisors face or expect to face:

• Managing expectations

Because we live in a culture where things happen fast, most people approach their finances with a fast-food mindset. They believe there is a shortcut to financial independence and they approach investing with a quick win mindset.

They want results, and they want it yesterday. They have heard about people who made some investments and became millionaires overnight. Many of them fall into what Warren Buffett called the “fear-greed” cycle.

Here is Mark Pitre, principal of California Financial Advisors: “The biggest challenge going forward is trying to educate younger generations that there is no short cut to financial independence. Many 35-year-old, and younger, individuals have never seen a down market … and they have grown up embracing debt. As such, they are ill prepared to endure any challenging economic [or] financial time.”

Many of these individuals will bulge at the words of Paul Samuelson that investing is watching paint dry or grass grow.

The problem for financial advisors is how to manage these expectations to avoid conflict down the line.

• Fees compression

On the one hand, regulatory, research, and technology costs are increasing. On the other hand, fees are going down. Competition is rising (aided by technology), and many financial advisors are cutting down on fees to remain competitive.

Here is Mark Mirsberger, CEO of Dana Investment Advisors: “The biggest challenge is probably dealing with significant fee compression in the face of rapidly rising research, regulatory and technology costs. You saw it [recently] with the brokers eliminating trade commission so … they’re going to have to find different revenue streams. I think for asset managers you’ve seen it within mutual funds and ETFs and now even with advisory firms, fees are going down … and pretty quickly.”

The problem for financial advisors is how to keep their fees without losing their clients to competitors.

• Disintermediation

Why do I need a financial advisor? With many websites dedicated to financial education, more people are asking this question. A fair question, we must admit.

After the statements above, Mark Mirsberger continued, “People are even discounting, at some level, how they even value advice. ‘I’ll just buy this basket of ETFs; what could be wrong with that?’” Why can’t I just buy some low-cost ETFs and achieve diversification. What could go wrong?

Charles Gofen, principal of Gofen and Glossberg, adds his thoughts, “One of the biggest challenges facing investment advisory firms today is disintermediation. People can invest by themselves rather than hiring an investment professional to manage their money. They can use exchange-traded funds to achieve diversification at a low cost, and as of – I don’t know, last week? — they don’t even have to pay trading commissions anymore.”

Financial advisors must now clarify why they exist and why reading blogs or watching videos online is not enough.

• Values

Everyone has values, and those values affect our financial decisions. People want to invest with financial advisors who have similar values.

Here is Mark again: “The biggest change and opportunity is investors looking to invest according to their values, and managers’ ability to integrate ESG analysis to improve investment research and improve risk adjusted returns. The next generation, and even the older generations, are understanding that, whether you completely buy into global warming or not, there are trends. People want to make a difference and leave the world better. They want to be consistent with their values. I think that’s consistent with social networking and people wanting to be with people like them and live and breathe their beliefs.”

Financial advisors must make their values known while understanding their target audience’s values.

Below are two other problems that Mark Cussen of Investopedia identifies:

• Staying in touch

In his words, “Advisors have more ways than ever to stay in close contact with their clients, but many fail to do so when things are going well. A constant flow of communication is necessary in order to maintain a solid relationship with most clients, regardless of what the markets are doing.”

The problem is for advisors to maintain communication with clients even when there are no specific problems with their portfolio.

• Managing information

“Some advisors get caught up trying to stay abreast of the ocean of information that’s available online and elsewhere. Smart advisors focus more on client behavior instead of reacting to the latest news. Advisors also need to be able to direct their clients to reliable sources of data that have stood the test of time in terms of accuracy.”

Financial advisors must point their clients to reliable information sources amid the information glut that is the information age.

The solutions that content marketing provides

How can content marketing help financial advisors solve these problems?

Managing clients’ expectations

The short term approach to life and investing that characterize the culture is a product of the information and education they receive.

Of course, the average human would love to make cool money in the short term and achieve financial independence after working for five years. Consequently, it becomes easier for them to match their expectations with their desires.

Long term thinking is harder, and people bred on the power of the immediate (here and now) may find it hard to embrace such an approach to life and money.

However, in the end, it all boils down to education and information.

If financial advisors don’t play an active part in the education of their target audience, others will do it.

There are four types of content every financial advisor should be creating:

• Attraction: These are the content optimized for the search engine. The goal here is to get brand awareness and visibility. By writing on topics that your target audience is searching for, you will attract them to your brand. 
• Authority: These are pieces of content that establish you as an authority on specific topics. Authority content can also serve as attraction content for prospects. However, they do more than attract; they help prospects and customers to understand your POV (point of view) on essential subjects. As Robert Rose, content marketing strategist, says it, “Traditional marketing and advertising is telling the world you’re a rock star. Content Marketing is showing the world that you are one.”
• Affinity: The goal is to communicate your identity and values to prospects and customers. These pieces of content highlight your brand positioning, your goals, and your approach to financial advisory. You can also use affinity content to anticipate and answer prospects’ objections.
• Action: Action content intends to take prospects further down the funnel.

 

To manage clients’ expectations, you need to start educating them before they even enter your funnel. You should create attraction and authority content that emphasize the importance of long-term thinking.

Apart from a commitment to education, you cannot change their minds. Don Draper, a fictional character in Mad Men, said it eloquently, “If you don’t like what is being said, then change the conversation.”

If short term thinking is a problem among your target audience, do something about it even before they enter your funnel.

Also, financial advisors should create authority and affinity content that emphasize the importance of long-term thinking to wealth management. Publishing such content at this stage will further deepen your clients’ conviction.

You should seek to contribute to a transformation of your target audience and customers’ approach to money. By doing this, you will help overturn the short term approach that is the bane of current culture and avoid misunderstanding with your customers.

“Our job is not to create content,” said Andrea Fryrear, an agile marketing advocate, “our job is to change the world of people who consume it.”

Content marketing can help you manage the expectations of your target audience and your clients.

Fees compression

One of the mistakes marketers make is to assume that consumers only buy products. Consumers buy brands. Many consumers will buy a product from a brand they love at a premium.

Marketers call this brand equity.

According to Investopedia, “Brand equity refers to a value premium that a company generates from a product with a recognizable name when compared to a generic equivalent.”

You can compete with other generic products through low cost and low price strategies or strive for brand equity.

What builds brand equity? It is brand loyalty. When people know and love your brand, you have brand equity. How do you build brand loyalty?

Below is an excerpt from a podcast edition titled “What is the future of loyalty?” from Marketing Week:

“Trust that leads to lasting loyalty likely won’t be forged on a single interaction, a temporary discount, or a free gift gated behind a mountain of frequent flier miles. Rather, it will take an ongoing commitment to delivering a wholly satisfying brand experience – something that loyalty-driving content efforts like chatbots, how-to videos, and customer testimonials are well suited to help you accomplish.”

 Loyalty is a product of trust. When your customers trust your brand, they will be loyal. The kind of trust that generates loyalty is, however, a result of “ongoing commitment to delivering a wholly satisfying brand experience.”

How do you deliver such experiences? Through loyalty-driving content efforts.

Chatbots, how-to videos, and customer testimonials are examples of loyalty-driving content that builds brand loyalty. Chatbots improve user experience, how-to videos educate them, and customer testimonials deepen their conviction about your brand.

By consistently creating content that connects emotionally with your clients, you will build the kind of loyalty that drives brand equity.

A study shows that 90% of consumers make up their minds about a brand after doing a search about it. If people search for your brand, what would they find? Do you have the kind of content that generate trust and loyalty (and brand equity)?

Content marketing can help you turn customers into brand loyalists, thereby building the brand equity that allows you to charge a premium for your financial advisory services.

Disintermediation

If people think they don’t need financial advisors, you have to let them know why they are wrong.

With the information glut, it is understandable why people will think like this. It is your responsibility to create authority and attraction content that changes their mindset.

Financial advisors need to produce content that emphasize why people need financial advisors to achieve their financial goals. You cannot outsource this. The life of your company depends on it.

Similarly, people have specific objections that prevent them from hiring financial advisors – fees, trust, lack of personal touch, etc. As a financial advisor, you need to create affinity content that answers these objections.

If people think they can’t afford financial advisors because “their fees are overboard,” create content to educate them on your fee structure. If they believe advisors are not trustworthy, create content that changes their mind. Take every objection you know and use the power of content marketing to answer those objections.

Disintermediation is a real problem. But with content marketing, you can turn things around. Remember, “Our job is not to create content. Our job is to change the world of the people who consume it.”

Values

If I pick any of your clients at random and ask them about the values that drive your brand, will they have an answer?

The clash of values that often occur is because financial advisors are not taking active steps to communicate the values that drive their practice.

Today, consumers care about growing their money as much as how it grows.

Affinity content comes to play once again.

Your prospects and clients should understand your goals and values. They should know your unique views and perspectives on various issues and how those views drive your practice.

If you don’t do this, the temptation is to create new values to match your next client’s values. If the next client has different values, you project another brand image to him or her. Keep doing this, and you will lose your trust.

If you have been following, you will understand why losing trust is dangerous to your business. In this world of authenticity, losing trust is as good as going bankrupt.

The solution?

Be upfront about your values. Create affinity content that highlight them. Be authentic. If you believe active investing is better than passive investing, say it. If you think diversification is not essential, say it. If you are not a fan of emergency funds, say it.

Staying in touch

As much as you should try to instill long term thinking into your customers, you can’t deny that they are emotional beings.

When the yield curve inverts or the Dow Jones is at the lowest point in a decade, they can panic. It’s human nature.

While you should not (cannot) react to every news, there are times your clients need to hear from you on the heel of some significant event.

During these times, you will need to create content to give them accurate information about what is happening and the actual implications. Don’t leave them at the mercy of rumor peddlers and anxiety-spreading analysts.

Take charge of the communication.

Consistent creation of helpful and useful content is another way to stay in touch with your clients. By doing this, you won’t need to wait for things to go wrong before communicating with your clients.

If you are not communicating with your clients, someone else is. Remember, customer retention is even more important than customer acquisition (don’t believe me, see the numbers). If you don’t want to lose your clients, maintain constant communication through consistent, useful content.

Producing authority content will also help your clients justify their decision to choose you. Knowing that you are an authority in the industry gives them more confidence in your work.

Managing information

If you do your job well, you will be the primary content destination of your clients. However, odds are you won’t be the only content destination.

It would be best if you also pointed them to sources you trust for data and information you do not provide. By being proactive, you can send them to sources that will not misinform or mislead them.

One way to do this is through content curation – the act of discovering, gathering, and presenting digital content that surrounds specific subject matter (EContent Mag). You can also do it by constantly referencing these sources in your content.

However you do it, the goal is to point them to reliable data and information sources.

Conclusion

Content marketing can transform any business in every industry, and financial advisors are not left out.

By consistently creating attraction, authority, affinity, and action content, you can create brand equity, develop a good understanding with your customers, increase your clientele, retain your existing customers, and grow your business.

The benefits are endless. Content marketing, done right, can grow your financial advisory business on autopilot.

If you are already doing it right, continue.

If you are not putting much effort into content marketing, you should.

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If you need help with your content marketing, contact me.