When you entered the business, did you ever think clients would hire advisors on the basis of a CARFAX-like profile? Amazingly, it’s happening now. Are you ready?
Clearly, transparency’s time has come. First, the rise of the Web 2.0 has made the Internet incredibly interactive. Result: Consumers now publish their every opinion online, fueling the rise of review sites like Yelp and Angie’s List.
Second, the advent of social-media platforms like Facebook allows those opinions to replicate virally with incredible speed.
Third, the 2008 economic crisis pummeled consumer trust of financial advisors and institutions. Consumers today are unwilling to trust without verifying. They need to verify advisor claims using third-party sources.
What Your Peers Are Reading
Now, I’m not suggesting consumer due diligence is a new phenomenon. Of course it isn’t. For years they’ve used FINRA’s BrokerCheck service. They also call state regulators to confirm licenses and disciplinary status, and check advisor complaint histories with the Better Business Bureau. However, these methods have been clunky at best.
No longer. Consumers can now access third-party websites to see how advisors really operate. And these sites don’t rely just on an advisor’s voluntary disclosures. At least one aggregates regulatory filings so consumers can view even damaging information.
Case in point: Brightscope. Last spring, this financial data provider launched its “Advisor Pages.” Based on aggregated SEC data, each advisor profile includes services provided, assets under management, client types, experience/employment history, licenses, disciplinary actions, advisor exams passed, compensation arrangements and professional designations. The page also provides links to consumer questions that advisors have answered, as well as the advisor’s own social media links.