The Trusted Adviser?

Each morning, when you look in the mirror, what is it that you notice? What thoughts immediately come to mind? Do you begin the day with a motivational mantra, reinforcing your goal to become the most successful retirement plan adviser within some specific geographical region? Do you immediately notice a “different” hair color or other feature that you would like to have become the benefactor of a makeover? Do you see someone you recognize as the most trustworthy retirement plan adviser on the planet?

Perhaps you see a little bit of each represented—but what you see is not nearly as important as what your clients and prospects notice when they see you. What clients and prospects see might be substantially different from what your mind conjures up at the sight of your reflection.

There was a time, perhaps as recent as 10 years ago, when a substantial amount of reputation was generated by “word of mouth.” A rock-solid verbal reference from an existing client to a warm and searching prospect was all that a retirement plan adviser needed to close the deal. In a few instances that entrée and execution have proved to be successful—but it is no longer the slam-dunk that such an introduction once was. Even though a referral might occur, the plan sponsor likely is going to conduct its own due diligence around a lead.

What Has Changed?

Advisers today are subject to two outside, but related, influences that have an impact on the dynamics of closing the deal: Internet search engines and empowered employees.

The Internet has become the first stop for many shopping excursions—including the services of a financial adviser. When conducting a Google search on the term “financial advisor,” I found the first 10 nonsponsored search results to be different from what I had expected. What I learned during my search was:

• Mr. Madoff is still considered a money manager.
• Ponzi is revered as a financial manager.
• You might not need a financial adviser.
• You can have an “expert” answer any financial question—just type your question.
• Your financial adviser “may be ripping you off.”

Growth for the personal financial adviser industry is anticipated to be at 34% (according to the Bureau of Labor Statistics—there were no data listed specific to retirement plan advisers).

As one who is in the middle of this industry, I was surprised at how much I learned by this simple exercise on Google. Fifty percent of the top 10 hits were related to the lack of trust that financial advisers have earned. Forty percent of the top 10 had headlines that, in my opinion, were either not accurate or very misleading. One of the first 10 hits reported the news story that two West Coast “money managers” were charged with securities fraud.

The Public’s Perception

The dynamic of empowered employees is that of public perception. Each and every one of us has been tarnished by the few who garner the salacious headlines. Why would anyone trust you over the financial adviser down the block, or their cousin or golf buddy? Why would anyone trust you after money manager Madoff?

Our ability to project our own trustworthiness by virtue of our registrations, designations, or affiliations is long gone. Trust is a fragile and fleeting attribute. Trust usually is built over a long period of time; however, as we have repeatedly observed since September 2008, it can be shattered instantly.

Buyers of retirement plan services employ a variety of available tools to make an informed buying decision—including the Internet, in concert with Google and other search engines. Retirement plan advisers face an ever-increasing uphill battle when the prospect is prejudiced by recent events. We are living in a time when search engine output reinforces that, perhaps, fraud in the financial services industry is not an aberration.

You might see the image of a trustworthy individual in the mirror; the public, including your potential plan sponsor and plan participant clients, might notice something much different.