WHERE IS YOUR ADVISOR’S BLOG?

The global 2012 Edelman Trust Barometer ranks financial services at the bottom again (even worse than banks). In this environment, how do you know if your financial advisor is looking out for your best interests?

The same study shows that social media has had a dramatic 75% increase as a source of trusted information. Granted, the base was small but that’s a major increase.

Blogging is an excellent way for advisors to continually show they're on your side. Does your advisor have a blog? If not, why not?

Questions

Here are some questions to ponder.

1. When did your advisor’s blog start? [Why not earlier?]
2. How many posts are there? [Why not more?]
3. How often are new posts added? [If less than weekly, why?]
4. When was the last post published? [If more than a week ago, why?]
5. Does the content educate you or sell to you?
6. Who writes the content? [If not the advisor, why?]
7. Is the content worth reading? [If not, why?]

Advisors continually look for more clients — even they claim to work “by referral only”. Blogging is a way to stand out.

Excuses?

I've been telling advisors to blog since mid-2007. They have many excuses for doing nothing. Three of the most common are: not allowed, no time and not able to write.

Not allowed

Large organizations rarely permit advisors to express opinions in public without pre-approval ... and maybe not even then. Policies can prevent online activity like posting links to articles, expressing opinions in groups or leaving comments on blog posts. Internal restrictions might even ban testimonials to outsiders on LinkedIn.

How bland.

Since bland doesn’t bring ka-ching, the organizations leave a loophole. Advisors are allowed to make questionable claims in seminars and meetings. Why? There's no proof of what took place. It's easy to claim that what you inferred, they did not imply.

Advisors who want to express themselves and show they put clients first could leave and start their own businesses. If that's too drastic, they could go through the process of getting their content pre-approved. While the results may look boring and generic, they can still do something.

No Time

Advisors make time for what matters to them. Shouldn't that include clients?
An advisor who doesn't have time might be unproductive. That's where Pick Four or other programs help. Perhaps the advisor's business has grown and requires more staff. That's a good situation unless the problem is retaining staff.

Can’t Write

Not everyone can write but they can learn. It's not as if we were born walking, talking or cycling. Written communication skills are essential and well worth mastering. Nothing bad could happen from improving. Help is available.

Excuse Busters

How do you explain amateur financial bloggers? They could use the same excuses as advisors but found solutions instead. They have the additional handicap of being outsiders. They need to spend time learning before they know enough to tell you. An insider has a huge edge.

Anniversary

This month marks my fifth anniversary of blogging. That's over 500 posts and 250,000 words. I had no training and “talent” is a myth-conception. We learn by doing.

I’ve been encouraging advisors to blog since 2007. I thought that advisors with the courage to share valuable free content on a regular basis would learn how and stand out. In return, they’d attract more clients, retain more clients and raise standards for laggards.

Links

• Blogging milestone: 5 years | 500 posts | 250,000 words
• The 100th post
• Building trust with blogging (Word11)
• The word advisors imply but dare not say
• Can an advisor serve two masters?
• How to spot biased referrals
• The talent myth-conception
• Your digital tapestry is your legacy
• Social media and trust (Edelman, Feb 1, 2012)
• 2012 Edelman Trust Barometer: Executive Summary
• image courtesy of dinostock

Podcast 156

direct download | Internet Archive page | iTunes

PS What do you think about advisors blogging, podcasting or creating video?

HOW TO SPOT BIASED REFERRALS

Once we got a flat tire on Highway 401 at night. We got towed to a tire shop that the tow truck operator recommended. Did he receive a financial incentive?
While site-seeing in India, our driver took us to see silk comforters at a particular store. Did he receive a financial incentive?

Fruits

When you go to an Apple store, you won't get advised to buy an Android tablet. You already know this. You wouldn't expect a bias at a place like Best Buy which sells both. You'd be annoyed if you found out that hidden inducements came ahead of your best interest.

When you’re referred to someone else for help — accountant, lawyer, coach, investment advisor, insurance advisor, financial planner, plumber — could hidden incentives bias the recommendations?

Some networking groups expect members to refer prospects to each another. This requirement may not be visible or disclosed. This is also a reason to be skeptical of testimonials on LinkedIn, but there spotting overlaps may be easier.

Financial Services

In financial services, there are many one-stop shops — perhaps where you bank or invest. They offer everything except carpet cleaning. That’s convenient for you and more profitable for them. However, your results might be suboptimal compared with hiring independent specialists who are good enough to have their own brands.

See Spot Run

Asking questions like these helps you uncover biased referrals.

1. Where would you recommend I go?
   If they can't or won't recommend anyone, be wary since they lack courage. A list of options falls in this wimpy category. If they say they're recommending the best place, be wary. “Best” may mean for them ...
2. Where else have you recommended that others go?
   You may find that referrals keep going to the same place. This is especially true in a one-stop shop. There are probably much better choices outside but only internal referrals are allowed.
3. How long have you known them? How did you meet? Why did you select them?
   Here the goals are to find out about the depth and nature of the relationships.

Ask in a conversational tone. The answers and delivery will help you gauge the value of the advice.

Buried

In some situations, hidden incentives may influence the recommendations you get. As a minimum, there are probably cross-referrals: I'll recommend you if you recommend me. Money might change hands. This is more likely in smaller organizations. The bigger places are more likely one-stop shops, which has other drawbacks. Even if you're informed about the payments, there may be an element of bias in the recommendations.

You may be comfortable with referral fees (or "affiliate marketing") as long as the payments get disclosed clearly ... in advance ... without you asking.

Recently, I've been looking for better ways to back up my data online. Some providers got glowing reviews but mainstream sites never even mentioned them. Maybe some incentive is affecting the recommendations?

The Fairest Way

At their core, referrals are fine. You probably give them already. If you know a good advisor (for example), why wouldn’t you send a friend or acquaintance to them? You all win.

You know your own motives. When you receive referrals, be wary. Even when you think you trust the source.

Links

• The foolproof measure of trust
• The word advisors imply but dare not say
• How advisors fool you (and what you can do)
• Case study: the doctor the insurance advisor mistreated
• The cost of getting advice from your banker
• Reasons to be cynical
• How to visit India
• image courtesy of Maxim Kulemza (Russia)

Podcast 155

direct download | Internet Archive page | iTunes

PS Have you been fooled in the past?