The coronavirus pandemic abruptly forced financial services firms to swiftly go digital with essentials to conducting business far sooner than they had likely planned. Next: Look for these now-stress-tested shifts to be prominent in the “new normal,” argues influencer April Rudin, financial services marketing strategist, in an interview with ThinkAdvisor.
According to the trends forecaster, founder of The Rudin Group, 64% of high-net-worth individuals are counting on their future advisor relationship to be digital.
In the interview, Rudin, who consults to the financial services industry exclusively, discusses major positive changes she sees occurring in the advisory space as a result of the pandemic. These include how the concept of wealth has changed and FAs becoming “co-pilots” with next-gen clients.
The Rudin Group’s focus is the “intersection of wealth, next-gen and fintech,” a confluence that brings big opportunities for financial services firms, Rudin maintains.
In the interview, she advises FAs to “take stock” of their “online properties” in preparation for redoing their brand. Now is a propitious moment to undertake such overhaul, she recommends.
With the goal of gaining visibility to ultra-high net worth and high-net-worth individuals on digital platforms, Rudin’s firm, based in the New York metro area, serves global banks, wealth management firms, RIAs, hedge funds and independent advisors through broker-dealers, among other facets of the industry.
ThinkAdvisor recently interviewed Rudin, on the phone from Fort Lee, New Jersey. Among the issues she addressed were the expansion of social media to social selling and an approaching “inflection point” for retirement-age advisors: Will they go, or will they stay — and work remotely?
Here are highlights of our conversation:
THINKADVISOR: Amid the pandemic, has fintech played a larger role for financial advisors?
APRIL RUDIN: COVID-19 has been a driver toward adoption of digitalization. Everything has been accelerated. The pandemic has given firms the ability to be much more digital, to “stress-test” digitalization and deliver on some of the promises that perhaps were only on the roadmap but that advisors have been forced to adopt.
What’s one stress test?
The ability to work remotely from home. Advisors were forced to do it, and they found that they can — even to the delight of some. That gives technology much more importance. I’m certainly not saying the pandemic is a good thing; but [amidst] the loss of life, sickness and economic devastation, [increased digitalization] has been something of a silver lining.
How has the pandemic impacted next-gen clients and their financial advisors?
For the millennial generation, and even some Gen Xers, this is the first financial crisis they’ve [experienced]. The way they deal with it and come out of it will impact how they think about money, financial planning, transparency, discretionary spending, retirement and investments. How they feel about it and handle it can be virtually shaped by their advisors.
As a result of the pandemic, what might be different in the relationship between next-gens and their advisors?
It will be much more of a partnership. The role of advisor will be a co-pilot, or a partner, rather than the, sort of, hierarchy of advisor [authority] and client [follower] that exists now.
What have virtual meetings done for the advisor-client relationship?
A lot of advisors have become more accessible to their clients. So clients have had more opportunity to get closer to their advisors, and advisors have had an opportunity to get closer to their clients way beyond that once-a-year call. Market volatility has also created an opportunity for advisors to provide more holistic financial planning.
Will any of this stick, or will things go back to the way they were before the pandemic?
I think all of it will stick; it will be the new normal. Clients and advisors will become accustomed to it. And that will be a good thing.
Has the pandemic changed the concept of wealth?
We’re thinking more carefully about the way we spend money and about time as a resource or asset. Discretionary spending has really been cut down. So there are different allocations that one might consider in a model portfolio that have nothing to do with securities or real estate investing.
What about strategizing for the future? What should advisors be thinking about now?
How they build relationships. In the “olden days,” relationships were built largely on investment return — that’s what made someone a good advisor. What we have learned is that it’s not just about returns.
Is there an overarching emerging trend in the advice business that you see?
There will be an inflection point that we need to pay attention to: Will more advisors be retiring — or will more advisors be staying because they won’t be able to retire? Will [older] advisors work part-time from home because it’s easier on them? Maybe they won’t need to acquire new clients. On the other hand, will they say, “The heck with it. I’m done!”?
What do you predict for robo-advisors?
A hybrid. There isn’t going to be a one-size-fits-all. The business model of the future will allow people to pick and choose, and cobble together the services they want and need.
When it comes to marketing their practices, what should FAs be working at now?
It’s a great time for them to take stock of their online properties and think about how they can move themselves forward by having a profile and messaging that’s more compelling than the typical advisor website; for example, [content] that [more thoroughly] describes their value proposition.
What else would you suggest that advisors do?
Turn the tables and take a look not only at their website but their LinkedIn profile, even their headshot. Do they reveal enough from the professional side and the personal side? Do they say what the advisor wants them to say? Maybe they can even go through these with clients and ask what they like and don’t like about the way the advisor works. Now is the time for advisors to evaluate and redo their brand.
How can FAs use social media more effectively?
Social media has evolved into social selling, which is more about building relationships online, and less about client acquisition. People working from home have more time to spend online looking at websites to get a feel for a firm or person they’d like to work with. Social media is definitely here to stay and is accelerating for firms and advisors who are adopting it.
You’ve grown and expanded your own company substantially since you launched in 2008. Was there a particular challenge you needed to overcome?
When I started my business around wealth, next-gen and technology, I went to the head of one of the big banks. He told me I was too old to be an entrepreneur. He told me banks will never hire outside firms, that high-net-worth [people] will never be on the internet and that social media was a fad. I feel like everyone has caught up with me!
What prompted you to form your own business?
My background was mainly in technology and marketing. I had worked for a bank in a high-net-worth environment. I could see how there would be an inflection point of wealth, next-gen and technology, and the way brands were marketed. All the wealth management brands were looking and sounding the same; for example, to signify retirement, they had a picture of a couple on a beach.
Do you think the pandemic might result in attracting more women to the financial advisor profession?
It could. As women are changing career paths and moving into new jobs, it’s the perfect entrepreneurial [profession]. [Many] women are the lead breadwinner and have proven that they have the ability to plan for their family. So that might lead them naturally to become [advisors] — which would be another positive outcome.
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