What do advisers have that Internet-based services don’t?
Increasingly, product purchases are being made online. Financial advisers need to show, via the web, what makes them different and valuable to the investor, says Internet psychologist Graham Jones
Every year at the beginning of January, toy retailers gather at London’s Olympia for the annual toy fair. Strange as it may seem, they are trying to pick what to sell for the next Christmas, almost 12 months away. It’s a strange business, toy retailing; almost all of your income comes in one month and you have to predict what people will be buying in that month, almost a year ahead.
But these days the toy retailers have an advantage – they can much more easily predict things thanks to the Internet. They can see what people are talking about; they can watch trends and can see which toys people want to buy before they even have to stock them. These days, instead of people browsing around a toyshop, they make their mind up in advance via the web.
It’s not a lot different for car dealers. Ten years ago, car buyers would visit an average of eight different showrooms before deciding which car to buy. Now, that average has plummeted to 1.4. That’s because people make their choices online; they visit the various manufacturer websites and choose their cars, only venturing into the local dealer to actually finally check it and buy it.
Indeed, whether you look at cars, toys or any other consumer item, almost all decisions to buy are made online. Research has showed that in 2012, some 53% of all purchasing decisions were made online – that includes consumer purchases as well as business-to-business ones. The trend in the data suggests that by the end of 2013 eight out of every ten purchases we make will be online.
Reaching the tipping point
That means that whether it is a car, a toy, or a pension, an ISA or a mortgage, the decision making process as to what to buy will begin online – and frequently end online too. For financial advisers this means we are at a tipping point.
People may feel they no longer really need financial advice; they can get more than enough good quality, accurate and helpful advice from a plethora of free websites. Indeed, some of these websites can even point them to the best product for the individual. So why would anyone need an IFA these days?
OK, I am sure you can argue your case and stand your ground. But it is no different to being an independent toyshop. Why would anyone need an independent toyshop when you can buy whatever you need from Amazon or Toys-R-Us? Like independent toyshops, IFAs have one thing over and above the web-based businesses – customer service.
If you want to succeed in these web-driven days, your web presence needs to ooze customer service. You need to provide online service that is gold standard. Your website needs to demonstrate practically, actively and constantly that you are service-led.
What does that mean in practical terms? It means a 24-hour phone number that is answered by a human being, who can do more than take a message. It means having online chat facilities 24-7, so that people can ask questions and get an immediate answer. It means being on Twitter so people can ask you questions directly.
You also need a web presence that is mobile friendly – over 40% of consumer journeys now start on a mobile device. If your website does not show up well on an iPad or other tablet device, then people go away within seconds. And don’t go thinking all this stuff is just for the younger generation – the fastest growing usage of tablet devices is amongst those aged over 65.
Customer service is not just about being nice to people; it is about serving their web-based needs too. Given that almost all people will now start their search for financial advice on the web, where it is free, the only competitive advantage you now have is the excellence of your online customer service. You can’t any longer just have a website; you need an experience.