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Want Referrals for New Clients? Get Them on the Web

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As regular readers of this blog are probably aware, I tend to be pretty skeptical about much of the hoopla these days surrounding social media and Internet sites. I’s not because I don’t think they could be true, it’s just that most of the time, there’s very little evidence to show that these claims are true.  However, when some hard evidence does come along, that’s an entirely different matter. 

Case in point:’s recently released survey on how investors find, screen and select financial advisors. Paladin, you may know, is an online database that matches pre-screened financial advisors with investors who are looking for advice. So it does have a bias about where investors do find advisors. What’s more, it’s not up-to-the-minute recent: it’s based on survey data from the fourth quarter of 2013. It’s not a large survey by any means: just 386 participating investors out of Paladin’s database of some 38,000 investors who used their services during the past two years. 

However, it’s a pretty good target sampling: the average age of those investors was 48, with average available assets of $385,000, and 71% of the respondents either had advisors or had used advisors in the past. What’s more, 32% of them came to seeking financial advisors, while 68% were seeking information about advisors. Taken together, the survey makes a pretty compelling case that, at least as far as the Internet is concerned, there is plenty of opportunity for independent advisors: and those who don’t have a solid—and searchable—web presence, need to get one.  

Here are the findings: 

1) How Do Investors Find Financial Advisors?

39.5% used referrals from family, friends and associates

25.3% used the Internet to find a financial advisor

13.4% used referrals from CPAs and/or attorneys 

Notice that, for this group at least, while the Internet hasn’t overtaken referrals as a source of new clients, it’s already passed accountants and lawyers—and is closing the gap for the No. 1 spot in, what, the past ten years? Max. That’s a pretty healthy rate of increase. 

2) Why do investors use the Internet to find financial advisors?

74.8% said the Internet enabled them to find and research advisors while maintaining their anonymity. 

This should be a big “aha!” for independent advisors. In today’s overhyped world, three out of four investors don’t want a sales pitch from a financial advisor. And I don’t think I’ve come across a group as anti-sales as the independent advisory community.  

3) Do investors have a preference for advisors from big Wall Street firms? 

16.3% said ‘Yes’

68.8% said ‘No’ 

Here’s how Jack Waymire, CEO of the analyzed these results: “The 16.3% number is interesting. [Just] six years ago, data from the Securities Industry Association put that number at over than 50%. I believe their number was as high as 62%, prior to 2008. All of the headlines have eroded Wall Street’s position of trust. Investors no longer feel safer based on brand names. Too bad they do not know more about the independent RIAs in their communities.” 

4) How do investors determine advisor trustworthiness?

23.9% use information found on the Internet

8.8% use testimonials from other professionals

7.5% relay on references

4.9% use FINRA or BrokerCheck 

Granted, the participants in this survey were already checking out advisors online, so it’s not a shocker that they rely on the Internet to decide whom to trust. I don’t know about you, but I’m constantly shocked at the amount of faith people have in things they hear on TV, or in print (yes, I said it). What this tells me is that the Internet is quickly becoming an equally trusted source of information, if it’s not there already. 

I know, for the past 30 years, we’ve been hearing that independent advisors won’t be able to rely on referrals any longer to build their businesses—and I’ve been one of the guys calling horse hockey on most of those claims. But with the Internet changing virtually every other business around the world, it’s just possible that this time, it really is different. 


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