More On Legal & Compliancefrom The Advisor's Professional Library
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
If you’re like most advisors, you’ve probably given some thought to using video for marketing purposes — after all, they’re ubiquitous on the Web — but you likely have not taken any concrete action.
That assessment is “empirical,” according to advisor technology guru Bill Winterberg, who put it this way in an interview with ThinkAdvisor:
“There are over 300,000 advisors in the U.S. and between 60,000 to 80,000 RIAs, yet I would say there are less than 100 advisors actively posting video content online.”
So advisors need not feel alone in their predicament but, according to Winterberg, neither should they neglect to keep up with changing business standards.
“Over the next five years, prospects are going to have expectations that they can watch something on advisors’ websites, whether that is an explainer video or a video biography that helps me figure out who you are and how you can help me,” he says. “Advisors who don’t step out and create these videos are going to miss the opportunity to convert these prospects to clients.”
Winterberg, who was a financial planner before forming FPPad in 2008 to educate advisors on technology — everything from customer relationship management (CRM) to going paperless — distinguishes between the video basics that every advisor must produce to the more advanced productions of the elite advisors who dominate video marketing.
The first “must-have” is what Winterberg calls an “explainer” video.
“That’s the 60- to 90-second video that clearly explains how the advisor and how the advisory firm helps people with specific needs,” he says.
He cites the file storage site Dropbox as a model advisors should emulate:
“Go to the Dropbox website and see the 60-second explainer video about managing your files and synchronizing your devices. The first 30 seconds explains these problems and the last 30 seconds shows how Dropbox solves these problems and ends with a great call to action: ‘Sign up for a free trial today.’”
Advisors too should conclude their videos with a call to action, he adds. “Ask the viewer to send an email, to schedule an appointment, to reach out to the advisor.” That puts the ball in the prospect’s court, he says.
The advisor tech consultant, whose free video broadcasts appear weekly on FPPad, says an advisor’s second “must-have” is a video biography.
“As a prospect, I want to know why this person is an advisor and why they wake up every day to be involved in this business,” Winterberg says, adding that a printed biography doesn’t cut it because it doesn’t convey “the human element” like video.
“It’s the mannerisms, the passion and it’s the way they say things — their expression — that does not come through in a written biography.”
Beyond these essentials that every advisor must have, there are a variety of ways advisors can express themselves in video both in terms of content and in terms of format.
As for content, Winterberg says it should “absolutely” vary among advisors since the video’s purpose is to demonstrate the advisor can solve the issues of his or her unique client base.
“One advisor should know all about taxes for physicians; another should know all the ins and outs of running a small manufacturing business. You should be very clear about understanding your niche and creating video content that addresses issues in that niche,” he says.
As to format, “there’s no right away of doing it; but there are a lot of wrong ways to do it,” he says.
“Not every advisor is comfortable in front of the camera. There should be creative ways to get the advisor involved in the video content without forcing the advisor to do something he’s not comfortable doing. When someone is in front of a camera and is not comfortable, that’s the first thing the audience sees.”
Winterberg cites Andy Millard, an advisor in Tyron, N.C., whose low-stress-investing series he regards as an effective way to leverage the advisor’s comfort in front of a camera. It helps that Millard has some acting experience.
“Andy Millard [comes across as] a human being. When you watch his videos, you feel comforted and you’re educated at same time. It’s a winning combination,” he says.
The tech guru is also a fan of Carbondale, Ill.-based CFP Jeff Rose, whose videos Winterberg describes as “cutting edge” and have an “unapologetic,” in-your-face style, challenging viewers who, for example, aren’t saving enough.
He cites Alan Moore of Milwaukee-based Serenity Financial Consulting as a third good example.
For those lacking the polish of a Millard, Winterberg suggests advisors get professional help:
“Bring in an acting coach—a producer who’s going to make the advisor comfortable. The coach should get the advisor to talk about those things that they are passionate about.
“We can all talk about what we’re passionate about; that can come out as a ‘wow’ experience on video. A good coach or producer can bring out the best in a person nervous in front of the camera,” Winterberg says.
While explainer videos should last a minute, Winterberg says that bios should be about three minutes, and additional videos should not exceed five minutes.
Advisor attire can vary. While family-office types should dress up, most advisors should avoid excessive formality.
“The goal is you want to be a human being: an open collar, maybe an open jacket, a nice blouse if you’re a female advisor” but not dressed to the nines, he advises.
Advisors ready to take the plunge into video will need to determine how they produce them. Winterberg says there are three approaches:
“First, is self-production and that is doing things like Vine videos, using your iPhone, Instagram. You can do that; it’s real; it’s not high gloss. The disadvantages are the video quality may be poor, the audio quality may be poor; it may not communicate the right message to your audience. It’s a double-edged sword,” he says: it’s cheap but risky.
The second approach, he says, is to buy “prosumer gear: a digital SLR camera; a nice lens; a dedicated microphone; a backdrop or green screen. That increases production quality—you can use cutaways; that keeps the audience engage,” he says, estimating the tab for equipment and editing software at about $2,500.
The third approach is to hire a pro. “Fully outsourcing will cost more but you leverage the talent and experience of the pro.”
Advisors who go that route are responsible for creating the script and making sure it passes compliance, but then they just show up in the studio.
“The pro films it, edits it, puts in images, uploads the video online and delivers the final product,” he says. Winterberg says such services start at about $1,000 to $2,000 a day to shoot several videos.