It has been over seven years since the financial crisis, yet investors are still less confident in the financial services industry then they were before the meltdown. A recent article in Investment News entitled Investor Trust. We Can Rebuilt It. helps shed light on the question whether investor trust can be rebuilt.
In the article, Victor Gaxiola, a former advisor and Hearsay Social customer advocacy manager, says: Yes, investor trust can be rebuilt but it essentially boils down to a blending of automated technology offerings and personal touch when offering investment advice.
It’s still all about the relationship
Much of what we’ve stated before, advisors do not have to be displaced by new automated investment technologies in order to get ahead. In the article, Gaxiola highlights that advisors can leverage new technologies and offer personalized services that can only be gleaned from one-to-one relationships with human advisors.
The article also states that automated investment services can take a lot of guesswork out of investing. True, “robo-advice” services offered by companies such as Betterment and Wealthfront can provide a wealth of information for many investors who require basic investing services. But, he says, “even the best predictive models can’t know exactly when someone’s life changes, correctly assess the full impact of that change and effectively adjust one’s investment strategy based on that change.”
After all, as Gaxiola points out, “you can’t have trust without an emotional bond or the faith that someone or something knows you well enough to understand the difference between true priorities and gut reaction.”
Social media is key
How can advisors find out what’s happenings in their clients’ lives? Simple: go to where clients are freely sharing detailed information about themselves online (i.e. on sites like Facebook, LinkedIn, and Twitter.)
Social media is not only useful to learn about existing clients’ activities (such as births, marriages, moves) it can also help generate new leads.The article cites a Putnam study that reported 66% of individual advisors who use social media for business found new clients through social interaction.
Couple technology with a professional
So, how can investor trust be rebuilt? Gaxiola says advisors can provide “timely, value-added, personalized services” to clients in new ways by not only continuing to use social media to connect and engage with their clients, but also leveraging automated technologies in new ways to re-establish trust in their clients and within the market as a whole.”
Automation has come a long way and will continue to grow, but advisors can rebuild trust by offering the very thing that automation simply can’t replicate – and that’s the personal touch.
Read the full article here.
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