More Large Finance Domain Sales

Following on from last year’s post about finance related domain names, I thought I’d post a couple more large sales that have occurred so far in 2012.

It seems that anything in lending market is pretty hot right now, and that is certainly confirmed in the figures below.  Insurance is still as strong as ever, however there haven’t been as many high quality names coming onto the market recently.

Here are a selection of the best sales from 2012 so far:

  • $100,000+ – HomeLoan.com.au
  • $33,001 – HomeLoanCalculator.com.au
  • $22,002 – CreditCards.net.au
  • $11,988 – Calculator.com.au
  • $10,800 – OnlineApproval.com.au
  • $7,452 – Calculators.com.au
  • $2,530 – InsurancePlans.com.au
  • $2,145 – Trauma.com.au

The buyer of homeloan.com.au (private equity firm, Aura Capital) would not confirm the exact price, stating only that it was in excess of $100k.  The same buyer of this domain was also behind the purchase of HomeLoanCalculator.com.au.

You may think that spending over $130,000 on these two domain names would obviously mean that the buyer is in the home loan industry, but that is not the case.

In an interview with SmartCompany, Aura Capital director Calvin Ng said that both purchases were purely opportunistic, and they hadn’t even determined a strategy for the domains yet.

Given that information, it would certainly seem that they see the potential for strong growth in the value of finance related domain names.

Insurance Domains

There is another life insurance related sale worth mentioning, however the purchase price cannot be confirmed.  This sale was of a functioning website rather than a domain-only transaction.

The domain name and website LifeInsuranceQuotes.com.au was listed on auction website Flippa, and although the auction ended unsold, we can see that the highest bid was $40,000.

I have it on good authority that a sale was negotiated in the end, and one would have to assume that it was for more than the high bid of $40,000.

Is It Too Late To Get In?

There’s no doubt that prices are really getting up there, but there are still plenty of bargains to be had.

In five or ten year’s time, I actually think they we’ll look back at some of the big sales listed above and think they they too were bargains.

Financial Advisers Not Embracing Content Marketing

I was reading an article in Risk Info last week which encouraged financial advisers to embrace content marketing.  You can check out the article here, and I’ve also copied it below:

Advisers Should Embrace Content Marketing

Advisers should invest in content marketing in order to achieve greater cut-through with their promotional activity, according to marketing expert Claudio Pannunzio.

Mr Pannunzio, President of US-based financial services marketing firm i-Impact Group, explains that content marketing involves the creation and dissemination of original and useful content aimed at educating key audiences, rather than just promoting a product or service.

“The ultimate goal of content marketing is to provide information on a proactive and ongoing basis; information that the target audience finds valuable and that ultimately positions the adviser as a trusted professional,” he said.  “In essence, your clients and prospects engage in conversation with you before you even know they are interested in your services.”

However, Mr Pannunzio warned that it is not simply enough to create content, the marketing material must also prompt action.

“This could be by simply downloading your newsletter, signing up for a seminar/event, accessing significant articles or white papers or becoming your advocates,” he said.

I 100% agree with Mr Pannunzio on the importance of content marketing, but in my experience most financial advisers are still way behind.

There are quite a few clients who I regularly write financial content for, but the vast majority of them are not financial professionals.

Most of my clients are website owners with no financial qualifications or experience.  Instead, they are smart and forward-thinking entrepreneurs who can see the money making potential from generating leads for financial advisers and mortgage brokers who cannot generate leads of their own.

It amazes me that financial advisers are willing to pay between $50 and $100 per life insurance lead, adding up to thousands per month in some cases, but they are not willing to invest in their own lead generating websites.

I do get the occasional financial adviser who will contact me looking for content, but unfortunately most of them have been time wasters.  I hate to say it, especially since I love the financial advice industry so much, but most advisers who have contacted me about content just carry on about their big plans without ever going ahead with them.

It has gotten to the point where I tell some financial advisers that I simply don’t have any spare capacity to provide content to them, because I know they are just going to waste my time anyway.  Unfortunately they’re also wasting their own time.

For the small minority of advisers who are embracing online and content marketing properly, the rewards over the coming years will be huge.  For those who fail to do so, they will be paying the rest of us for leads for the rest of their working lives.

Benefiting from the latest Google changes

This article was originally written by Shane for Adviser Voice.

We should all know by now that website content is important for our visitors as well as the search engines, but recent changes by Google could give smart financial advisers an advantage.

The online space is getting more competitive every day when it comes to financial services websites.  There is competition from other financial services firms, as well as the growing number of lead generation websites that are coming from outside of the industry.

Financial advisers should already know the importance of original website content, but this week Google have made further changes to their search algorithm that means original content on its own will no longer be good enough, and they now want your content to be kept fresh as well.

Google states that more than one-in-three search queries will be affected, which is certainly a significant number.  They had this to say in their release:

“Given the incredibly fast pace at which information moves in today’s world, the most recent information can be from the last week, day or even minute, and depending on the search terms, the algorithm needs to be able to figure out if a result from a week ago about a TV show is recent, or if a result from a week ago about breaking news is too old.”

So how can smart financial advisers benefit from these changes?

Let’s take a look at the average financial services firm website.  Generally they will look very pretty, and they’ll have the standard pages that cover the firm’s services, staff profiles, contact details and maybe a few technical articles.

Some firm’s websites will have a blog or news section, but the majority I’ve seen are rarely updated, with some showing the ‘latest news’ from three years ago!

When combined with some link-building from the firm’s SEO provider, currently these sites tend to rank fairly well for search phrases such as ‘Sydney Financial Planner’ etc.

But with the latest Google changes, there is a window of opportunity for smart financial advisers to leap ahead of their competitors by adding fresh and original content to their websites on a regular basis.

So how can you do this?

Well the first step is to get a blog or news section onto your website that you can easily update yourself.  The next step is to start typing!

As financial professionals we do a huge amount of reading and listening every week.  There are CPD articles to be read, conferences to attend, product updates from the insurers and fund managers and plenty of news in the press.

There are many of sources of new information in our industry, so why not spend half an hour putting together a quick summary for your website?  You don’t have to be a Walkley Award winner; you just need to throw together 500 words of content that are relevant to the industry and the clients that you want to attract.

If you can do this once a month you’ll give your website a healthy boost in the rankings.  If you can increase it to once a week you should see some major results, and if you can start pumping out multiple items every week, the sky (or the number one ranking in Google) is the limit!

An additional benefit of regular content is that you can send out more frequent Facebook and Twitter updates, which gives more chances to interact with your current and potential clients.

The internet is increasingly the first place that people go to when searching for information on life insurance and investment, so if your website can out-rank your competitors you will have the greatest chance of attracting new clients at the expense of your rivals.

Start updating your website today with fresh and original content, and you will be rewarded.

PS.  If you’re not up the task of creating your own regular content, talk to me about how I can help you.

Tips for Financial Advisers Buying Internet Leads

This article was originally written by Shane for Adviser Voice.

Traditionally financial advisers and planners have obtained their leads from existing clients and referral partners, but as with many industries, the internet is changing things in a hurry.

When I first moved into the advice side of the industry I would ask a lot of advisers how they obtained their leads.  Most would say referrals from existing clients, whilst others had strong referral partnerships in place with accountants and mortgage brokers.

At that point in time no one ever told me they obtained leads from the internet, but fast forward to today and the number of financial advisers obtaining leads online has increased significantly.

Out the advisers I speak to who are obtaining leads online, the vast majority are not coming from their own websites.  In fact, most tell me that their own websites have failed dismally in generating leads.

Instead, they are buying leads from the growing number of websites setup by people outside of the industry who are seeing the money to be made from financial lead generation.

There is certainly nothing wrong with buying leads from these people, and I’ve spoken with plenty of financial advisers who have had success by operating in this manner.  Indeed, I was first put onto this activity by a former manager at ING (now OnePath).

If you are going to buy leads online, especially from a website that may be run by someone who has no formal qualifications in finance, there are some major issues to consider and to look out for.

A different approach

Internet leads require a completely different approach to leads provided by referral partners or existing clients.

When receiving leads from referral partners you are generally not competing against anyone else for the business.  Instead the referral partner has identified a potential need, and it is your job to explore that need with the general target of making a sale.

Internet leads are almost the opposite of this.  In this case the potential client has already identified their own need, and they are simply looking for the right financial adviser to fulfil that need for them.

In many cases a potential client will be requesting quotes or information from a number of websites, so you could be finding yourself competing against other financial advisers who have also bought leads for the same client.

So instead of convincing the client that they have a need, you are convincing them that you are the right person to fulfil their need.

Outright purchase or commission split?

This is one of the major questions to think about when buying leads.  Do you want to pay an upfront fee to purchase the lead outright, or do you want to pay a split of your commission on any successful sale?

Both options have their advantages, and the right answer really depends on a few different factors.

If buying outright, on average you will be looking at $50 per lead.  If going down the commission split path, you will generally need to share around 25% of your commission depending on whether or not trail is included in the split.

Let’s take a look at both options, assuming an average commission of $2,000 and a conversion rate of 25%.  We’ll use a number of 100 leads.

If you bought the leads outright you would be paying $5,000 for a commission return of $50,000 that you don’t have to share.  This would leave you with a profit of $45,000.

If you were paying a commission split you’d have to hand back $12,500 of your $50,000 commission, and potentially an ongoing share of the trail.  This would give you a profit of $37,500 which leaves you $7,500 worse off that if you’d have bought the leads outright.

At first glance it appears that buying outright is the better option, but it really depends on the quality of the leads.  If you were only able to convert 10% of the leads the figures would be quite different.

Based on the reduced conversion rate the profit (excluding office expenses etc.) would be $15,000 whichever way you went.  If the conversion rate dropped below 10% a commission split would become the more profitable option.

As I mentioned earlier, the right answer really depends on the quality of the leads and what sort of conversion rate and average commission you expect to achieve.

The target client

The target client of the lead generating website will have an impact on how desirable the lead will be for your business.

Many of these websites market themselves on offering the lowest premiums, and it’s not uncommon for potential clients to request a quote from more than one website.  If you are not prepared to compete based on price, then these leads may not be right for you.

On the other hand, if you are fairly new to the industry and are still learning about the products, purchasing leads from a website that targets insurance for surgeons or barristers may not be the most suitable option at this stage.

Compliance

From my experience, most financial advisers buying internet leads are happy to leave the compliance issues up to the website owner.  After all, the adviser does not own the website and has no connection other than buying leads, so what’s the problem?

Most of the people running these lead generating websites do not have financial qualifications, and as they are not AFLS holders or Authorised Representatives (nor are they passing themselves off to be) they have little or no responsibility with regards to ASIC.

This doesn’t mean that their websites all contain incorrect information, indeed many of them are very well put together, but it does leave the door open for mistakes and issues to slip through.

Recently I conducted a full compliance audit on one such website, and whilst the majority of the site was okay, there were a couple of major errors that could have led to a successful complaint by a client.

If a client has relied upon information on that website when making a decision to proceed with your recommendation, there is the potential that you could get dragged into a complaint involving the client, the website owner and of course yourself.

Potential compliance issues shouldn’t turn you off internet leads completely, but it is important to be comfortable with the content on any website that you are considering buying leads from.

To buy or not to buy?

There is no doubt that internet leads will continue grow into one of the largest sources of clients for financial advisers, and with the current trend of the most successful sites being owned by people who are not financial advisers, it is clear that the buying and selling of leads will continue for a long time.

Is a strategy of buying internet leads right for you and your practice?  It really depends on your target market and your way of doing business.

If you partner with a lead generating website that fits your business well, it can be a terrific way to boost your client numbers and potentially introduce some diversity to your client book.  It can allow you to concentrate on providing good service and advice whilst someone else takes case of bringing in the leads.

But if you partner with a website or a group of websites that don’t fit your business, you could find yourself wasting a lot of time and money on leads that will never become clients, or clients that you don’t really want anyway.

The alternative to buying internet leads is to build your own lead generating website, but that’s another whole subject!

Creating your own content

I make a fair chunk of my living from creating content for others, so why would I write an article telling you guys how to create your own content?  I don’t know to be honest!  But I do like to share, so here goes…

There is no reason why any financial adviser or other financial professional could not create their own content.  There are a few reasons why they don’t, but I’ll get onto that later.

As financial advisers (or a former financial adviser in my case) we all have a huge amount of knowledge stored in our heads.  Right now, all of this information is stuck in our heads, and its only chance to escape is when we are talking with a client, putting together an SOA or the million other things we do in our working day.

Even though that knowledge gets the chance to escape, it isn’t really stored anywhere except in your client’s head (if they can remember everything you said) and in your file notes and SOA (which will likely be filed away for the next seven years, rarely to be looked at again).

Besides using all of this knowledge and experience to help your clients (which is a great use – don’t get me wrong) we can also use it for another worthwhile purpose – to create content.

Why would you want to create content?  Well in this context we’re really talking about content for your website, and the major benefits of content for your website can be read about in my earlier post.

If you’ve read my earlier post on the benefits of good content for your advice business, you will know how important this is to your website and to the growth of your business.

You could pay someone like me to write your content, but most financial advisers should be competent enough to write their own content.

What would you write about?  Believe me, there are many things trapped in your head that would be useful if turned from memories and thoughts into readable words:

  • Information about how different policies work
  • Your opinions on the important of different products
  • Case studies from previous clients you have helped
  • Your thoughts on different strategies and how they can help people
  • Reviews of new products available in the market
  • General interest stories about the industry
  • Information and stories about your own time in the industry

There should be enough there to keep you writing for a very long time!

That’s one excuse for not creating content that we can strike off the list, but the reality is that there are plenty of other reasons why advisers don’t write their own content.

   1.  They don’t believe in the benefits of content

Many advisers are very old-school in their thinking, and I include a lot of younger advisers in that group.

They don’t believe or understand how good content can improve not only the search engine rankings of their website, but also the likelihood of then turning your website visitors into leads, and then leads into clients.

For those who still don’t believe in the benefits of good content for financial websites, I will again refer you back to my earlier post.

     2.  They don’t have enough time

This point is actually fair enough for many advisers.  After all, why spend an hour (or more) writing your own 1,000 word article when you can pay someone like me just $90 to do it for you?

If you think you can earn more than $90 an hour doing client work (which any good adviser certainly should) then it wouldn’t make sense not to have me write for you!

     3.  They doubt their writing skills

Many advisers are probably better writers than they think, but it’s a fact that some people just aren’t good at writing content.

If you’re one of these people, then again it’s probably a good idea to have a professional writer like me look after it for you.  After all, you don’t want your writing style to turn off any potential clients that may have found their way to your website.

At the end of the day, I personally think that with a bit of time and practice any financial adviser should be able to write satisfactory content for their website.  But if you don’t have the time or interest in doing it yourself, then it might me time to get in contact with me and have a professional do the work for you.

Prices for my content are extremely competitive, and thanks to my considerable experience in the industry, including time as a practising financial adviser, you can be assured of the quality and technical accuracy of my work.

How content can help your advice business

Content is king!

Well that’s what they say in the world of online marketing and publishing.

There are two great reasons why content is so important in today’s online world:

  1. It attracts visitors to your website via search engines (eg. Google)
  2. It gives visitors a reason to stay on your website, and ultimately become a client

How does good content achieve this?

Content for search engine optimisation

If you’ve been in business for more than a week, you will have heard of search engine optimisation, or SEO.

SEO is simply the art of getting your website and its pages as high as possible in the Google (or other search engine) results.

The higher you are in the results, the more likely you are to be clicked on.  And the more you are clicked on, the better chance you have of securing new clients.

There is only one thing that Google loves more than original and relevant content, and that is original and relevant content that is fresh!

If your website doesn’t contain much relevant content, the content you’ve used is not original, or the content has not been updated for a while, then you’re really letting yourself down and missing out on potential clients.

By having original and relevant content on your website Google will recognise that you are an authority on the subject, and will know to put your website higher up in the search results.

If your content is also kept fresh and is continually updated, they will give your website even more authority and therefore rank it even higher in the results.

But be warned, because Google is smarter than you might think.  If you believe that you can take generic articles from other sources and just change a few words around, or that you can just stuff your content full of terms like ‘cheapest life insurance’ and ‘best income protection’ – you better think again!

Google knows when you’ve tried to use non-original content (even if you change a few words around) and it also knows when you are “keyword stuffing” your content just so you can rank well for certain terms.

If Google catches you, you may well find yourself heading south in the search results very quickly.

Content for your visitors

It’s all good and well to write content that is designed to please Google and the search engines, but what’s the point if your website visitors are turned off by this style of writing?

If you have the term ‘cheapest life insurance’ forced into every paragraph of your content, the visitor is quickly going to sniff a rat and may disregard your website as spam or some other unprofessional website.

You need your content to make your website visitors feel comfortable with you.  You want the content to instil a feeling of trust into the reader, and to have them feel that you must be an authority on the subject.

If your website can make your potential client feel comfortable, have some level of trust, and think of you as an authority, then 80% of the job is done before you’ve even spoken to them!

Getting the mix right

It’s important to get a good balance in your content to keep Google happy as well as your website visitors and prospective clients.  There is definitely an art to this style of writing, and when it comes to financial services it is not easy to find a writer who can pull it off.

Thanks to my decade in the financial services industry and time as a financial adviser, combined with my love of writing and experience in website development, I have been able to develop a writing style that will please both the search engines as well as your clients.

I have written content for dozens of financial websites in Australia, many of which rank in the top three results for very competitive search terms.  Of course my content isn’t the only reason they rank so highly, but it certainly helps.

If you would like some professionally written content for your financial services website, please give Shane a call on contact someone else as I no longer provide content for others. 🙂

You may be very surprised by how inexpensive good content can be…

Finance related internet domain names

Hot on the heels of my recent post about the $125,000 sale of investmentproperty.com.au I thought I’d put together some more sales results of Australian domain names that relate to the finance industry.

It may surprise some of you to learn that most of these names have NOT been purchased by insurance companies or large advice firms.

Instead, many of them have been purchased by internet marketers and ‘domainers’ who develop these sites with the aim of generating leads for other financial professionals.

This has proven very lucrative for some internet marketers, many of whom simply work from home with a laptop, an internet connection, and the balls to spend big on domain names knowing that the returns can be even bigger.

$19,000 – HealthInsurer.com.au

$16,223 – PetInsurance.com.au

$15,001 – CreditCard.net.au

$15,000 – Claims.com.au

$12,500 – CreditReport.com.au

$12,001 – LifeInsuranceComparison.com.au

$7,900 – Insurance.net.au

$5,152 – FuneralInsurance.net.au

$3,106 – IncomeProtectionAustralia.net.au

$3,001 – LifeInsuranceComparisons.com.au

$2,050 – LifeInsurancePlans.com.au

Some of those figures are quite impressive, but keep in mind that most of the domains listed above are not premium domains.

Why not?  First of all many of them are the ‘.net.au’ version instead of the more commonly used ‘.com.au’ version.  Industry research suggests that a .net.au version may be worth as little as 10% of the value of the more fancied .com.au version.

The reason for this is simple.  If you went out and marketed funeralinsurance.net.au all over the local radio and billboards, what do you think most people would type into their computer?  That’s right, they’d type in funeralinsurance.com.au!

Another reason for many of the domains listed above not being premium name is due to the addition of third words, such as LifeInsuranceComparison.com.au and IncomeProtectionAustralia.net.au.

Even the highest valued domain on the list isn’t quite premium, since it uses the less commonly used term HealthInsurer.com.au.  If it was HealthInsurance.com.au you could probably increase the value by a factor of ten.

So why are these domains so valuable?

In the case of PetInsurance.com.au and CreditReport.com.au these are what are known as ‘category killer’ domains.  A bit like RealEstate.com.au is the category killer in the real estate industry.

For the rest of the domains, perhaps with the exception of claims.com.au, the reason for their value is due to Google’s love of domain names that match the users exact search term.

For example, if a user searches Google for “life insurance comparison”, the website at LifeInsuranceComparison.com.au is going to have a huge advantage in the rankings over other websites that don’t have those words in the domain name.

Furthmore, a user is more likely to click on one of the search results that contain their search term in the domain name, as they can be quite certain that that website will contain the information they are looking for.

So what can advisers do about this?

For starters, I recommend you start grabbing some domain names for yourself!

Sure some of the names aren’t cheap, but if you picked up LifeInsuranceComparisons.com.au for $3,001, how many cases would you have to write to cover your investment?  Makes sense doesn’t it…?

The sales results I’ve used in this post have come from Netfleet and Drop, two Australian companies that specialise in auctioning domain names.  If you have a spare moment, it may be worth your time checking out both sites and seeing what’s available.

Investment domain name sells for $125,000

Ever since I discovered the value of ‘exact match’ domain names I have been trying to snap them up for my business.

What is an exact match domain name?  Basically it’s a domain name that matches your product or service perfectly.  For example if you were selling life insurance, the perfect domain name would be lifeinsurance.com.au

The problem is that a lot of other people have caught the exact match bug too, and prices are starting to get fairly high.  Today though, they reached new heights…

The domain name www.investmentproperty.com.au sold for a whopping $125,000 on Netfleet.

This may seem like a ridiculous amount for something as basic as a domain name, but stop and think for a moment about the number of people who would search for the term “investment property”…

Need some help?  Well I can tell you that according to Google, there are 49,500 people who type the phrase “investment property” into Google Australia every month.  That’s over 1,500 people every single day!

Now think about the dollar figures involved in property investment, and all of a sudden $125k actually seems quite cheap.

I would encourage all financial advisers and planners to snap up any exact match name they can get their hands on, as this is really the way of the future.  Something like lifeinsurance.com.au is probably going to be way out of the ballpark for most firms, but keep your eye out as you never know what might pop up for a reasonable price.

Online Enquiry Forms

As a financial adviser, why do you have a website?  Some of you will say it’s about branding or profile building, but ultimately it is to attract leads.

Once your website has gained the lead, then it’s your job to convert that lead into a happy – and profitable – client.

Getting prospective clients to your website is often the biggest hurdle, but in this article I’m going to skip that step and assume that the visitor has already made their way to your website.

There are many different styles of adviser websites out there, and just as many different styles of enquiry forms.

I’ve delved deeply into many financial advisers’ websites; firstly as part of my compliance role when I was approving adviser websites for a large dealer group, and more recently as part of my research for both my own websites and those of the advisers I partner with.

Many adviser websites use a very basic enquiry form that simply collects contact details and perhaps some brief details about the type of service the client is looking for.  This type of enquiry form often features prominently on the front page of the website.

Whilst I like the idea of having the enquiry form as a ‘call to action’ on the front page of the website, I do wonder about the effectiveness of such forms, and the large amount of front page real estate that is lost in making space for the enquiry form.

If someone is only providing their name and contact details, they know very well that all you’re going to do with that information is use it to call them back.  Not that there’s anything wrong with that, but if the prospective client knows that will be the case, why wouldn’t they just call you themselves?

On the other hand you have the more complex enquiry forms.  These are generally far too large to place on the front page of the website, and will instead have their own dedicated page.  Obviously you would still be placing prominent links to this page from your front page, and every other page of your website.

I have had plenty of advisers – and so called web experts – tell me that the shorter enquiry forms are far more effective.  Their rational is that a prospective client is much more likely to complete a form that takes thirty seconds rather than one that takes ten minutes.

But I disagree.

My company owns a portfolio of websites that gather life insurance leads.  Over the years we have used short and long enquiry forms, placed in different sections of the websites, and the results have been very different.

We have found that short contact forms on the front page deliver far fewer leads than our more complex forms, and furthermore the leads from the complex forms convert into paying clients at a much higher rate.

One of our most successful websites actually features our most complex enquiry form.  Over the years we have continually added more questions to the form and made it more difficult to complete, yet the number of enquiries we receive continues to increase every month.

The form on this website is now so comprehensive that two dealer groups have accepted it as a fully completed fact finder.  That saves a huge amount of time, and also makes for an extremely good lead.  Not only do we know a lot about the client before the first phone call, but we also know how serious that person is due to the amount of time they have invested in completing our lengthy form.

You may be thinking that a lot of prospective clients will leave the form half-finished when they get tired of answering questions, but our statistics show that we have very few ‘dropouts’ with our forms.  If someone isn’t committed to filling out the form we probably don’t want the lead anyway.

I know that most web designers will keep telling advisers that short enquiry forms are better, but if you take that advice then I believe you are costing yourself business.  I have spoken to plenty of financial advisers who have spent thousands on their websites, only to receive not a single lead from it.

Now I’m not saying that a longer and more complex enquiry form will result in a flood of leads for any old website.  What I do believe is that a well designed website that ‘funnels’ visitors through to a comprehensive enquiry form will be more effective than one that expects the visitor to enter their contact details on the front page without having had a chance to read through the website.

Online strategy is all about experimentation.  If you currently use a short enquiry form on the front page of your website, try investing a few dollars in having your web designer implement a more detailed form, and use the saved space on your front page to further promote your services.  If it doesn’t work, little has been lost.  If it does work, you could have a lot to gain.

The future of advice models

Last night I read an interesting post on Linked in by Sean Graham (executive director at Millennium3) regarding future advice models and the way in which clients and advisers will interact.

Sean’s role at Millennium3 includes heading up the compliance team, and I must say it’s great to hear someone from compliance not only acknowledging the role of technology but actually promoting it.  I hope that the heads of compliance at other dealer groups can start to take a similar view in the near future.

Is Max Headroom the very modern model of the future financial adviser?

Most financial planners are wedded to the traditional, face-to-face storefront publisher model of financial advice but while this may have worked in the past, technological changes and consumer preferences suggest that wired/virtual/on line relationship (the Max Headroom model) might be the best model for the future.

Neuropsychological and consumer research shows peoples’ reducing need for complexity, strong preferences for on-line relationships and swift response and a distrust of “holistic” solutions? If this is the future what are we doing to prepare? (or are Ys, Zs and their successors of no interest to us?).

In my view, the future is wired client relationships, wiki advice models and lego-inspired strategies but I’m interested in understanding your view of the future and what are you doing (or what have you done) in your business to address the future of advice?

And here was my contribution to the discussion:

For risk insurance, online is clearly the way forward.  For many people, getting insurance cover online is not only a convenient option, but also a preferred option.  There are so many benefits such as the choice to deal with who you want when you want, no pushy salespeople trying to get you to sign up, and the feeling of empowerment that one gets by looking after their needs themselves.

On top of that, there will always be a perception (rightly or wrongly) that you can save money by getting your insurance online rather than dealing face-to-face with an adviser.

When I started as an adviser I was told that getting leads was going to be the most challenging aspect of going it alone.  I was also told that websites “don’t work for advisers”.  Well, my website brings me so many qualified leads that I’ve been selling the surplus leads to other advisers, so if anyone still thinks that online doesn’t work, they’re wrong.

Another benefit of building an online customer base is location diversity.  I am located in Brisbane, however the majority of my clients are located outside of Brisbane, and around half of them are located interstate.  This helps to give you exposure to booming areas outside of your own, and also provides protection if your own geographic area is experiencing a decline in activity.

When it comes to the investment side of things, particularly full financial planning, I think there will always be people who want to sit face to face with their adviser.  Increasingly though, there will be people who are happy to speak with an adviser remotely, and those who wish to bypass the adviser completely and handle their own affairs using online services.

Ultimately, the right model probably comes down to your target client and how they want (or don’t want) to deal with you.

If you’re not moving your business online and embracing technology, you will eventually be left behind.