Advisers Warming Slowly to Tech-Based Communications

Well over half of advisers are not communicating with clients via video, and only 7% are utilizing video to connect with clients on a regular basis.

Redtail Technology has published the results of its AdvisorComms 2019 Survey, spelling out retirement advisers’ and wealth managers’ preferences and strategies for communicating with clients.

To gain a better understanding of how firms budgeted for communications, respondents were asked what the majority of their communications budget was being spent on this year. According to the survey, the top five budgeted items were upgrading tools, technologies or processes (33.8%); improving the quality of existing communication assets (26.3%); engaging more on social media (13.0%); hiring dedicated communications staff (10.6%); and launching new communications campaigns (9.4%).

Redtail’s research finds that advisers are largely relying on, or limiting their practices to using, the “traditional” methods of communication with their clients, such as in-person meetings and phone calls. Firms appear to be confident in both the value and engagement levels of in-person meetings and phone calls, though they also appear to be warming up towards tech-based communications.

The research suggests some widely used communications technologies are still underutilized or not used at all by respondents. Well over half (59%) of respondents are not communicating with clients via video, and only 7% are utilizing video to connect with clients on a regular basis. At the same time, Redtail finds, nearly 87% of respondents think their clients would like to communicate with them via text, but 29% have a “no client texting” policy within their office. Further, nearly 41% of respondents have not been approved by their broker/dealer for texting with their clients.

“Due to the nature of the industry, particularly in terms of its regulation, financial services is often significantly slower than others to embrace new communication technologies,” says Brian McLaughlin, CEO of Redtail Technology. “That said, we weren’t surprised by how much adviser offices still rely on phone calls and face-to-face meetings; what did surprise us was how little they appear to be incorporating alternate forms of communication that might be better suited for specific types of outreach while also helping them to address some of their biggest challenges.”

McLaughlin says the firm’s research indicates opportunities abound for offices in terms of scaling their practices and honoring client communication preferences.

“In many cases it may be as simple as retooling their usage of available communications technologies,” McLaughlin suggests. “Additionally, the results lead us to conclude advisers may not be taking advantage of opportunities to strengthen relationships through more precisely tailored content to clients and prospects. In a competitive market, taking advantage of either of these opportunities should produce dividends.”

Speaking earlier this year on the same topic, Mark McKenna, head of global marketing at Putnam Investments, said advisers’ use of social media platforms is increasingly important. In addition to the role of evolving client communication preferences, greater social media use is also expected to be accelerated by the U.S. Securities and Exchange Commission’s ongoing overhaul of its formerly strict advertising standards into a more workable, technologically aware framework.

“I used to hear advisers who said that they didn’t have time to learn a new communication medium or technology,” McKenna said. “Now they are all asking, ‘How do I use social media in best way?’ Today, most advisers realize they can reach targeted individuals on social media far more effectively than just doing a seminar. Social media is more efficient, and it helps create a dialogue.”

As noted in the 2019 Putnam Investments Social Advisor Study, back in 2013, only 5% of advisers were using Instagram for business purposes. Today, that number has risen to 38% of financial advice professionals. LinkedIn, meanwhile, was already used by 71% in 2013, rising to 72% this year. Use of Facebook is up almost 40 percentage points (62%) compared to 22% six years ago, while Twitter use increased from 16% of advisers to 52%.

The Putnam study shows that even though 83% of U.S. advisers are applying social media communications in their practices, and six in 10 advisers label themselves as social media experts, only 15% are “demonstrating highly skilled approaches.”

McKenna doesn’t consider this finding a failure of financial professionals, as it takes time and resources to become a social media expert. For advisers looking to up their social media game, he suggests doing some benchmarking of their social media practices against other firms to understand how they score in comparison.