Why Create a Customer-Centric Advisory Practice?

This revolutionary shift between the sellers and buyers of financial advice has taken place as barriers to access of financial information have fallen and the amount of choice in the marketplace has risen. These two factors mean that advisory practices that truly focus on their clients and work towards creating a customer-centric practice will position those practices to thrive and grow. Those who don’t — or who pay lip service to the idea of client-centricity — will be more vulnerable to the competition, including other RIA firms, robo advisors and hybrid robots.

Let’s take a quick look at the reasons behind this shift:

1. Access to information: Consumers no longer look to advisors, wirehouses and other financial services firms for information about investing and financial planning. Today, customers can find out information about just about any type of financial service or product and any advisor or firm, anywhere, anytime. That means the customer is more in control of the relationship, or potential relationship, with an advisor.

2. Era of choice: Customers no longer have to choose between Wirehouse #1, #2 or #3; instead, they have local options, which likely include wirehouses, RIAs, brokers, insurance agents and asset management companies as well as online options, which includes all of the above plus rob-advisors and hybrid robos.

So what does that mean for you and your practice?

Access and choice translate into more control for clients. They aren’t sitting around, waiting to hear from you to make a decision about their investments or their finances. Instead, clients and potential clients are searching for the information that appeals to them, when they want to, either at home or from anywhere with their mobile device.

While an overload of choices and information can leave clients and potential clients feeling beleaguered and may ultimately translate into an individual client or potential client not taking action, the perception of access to information and choice has a powerful impact.

Today, clients and potential clients have more control and power over their investments and the relationships they enter into to help manage their investments and finances than ever before. While many may not realize this, more are, and are taking action as the universe of information and choices continues to expand.

In a continuing series about creating a customer-centric practice, I’ll explore the implications around this trend and what you can do to make it work for you. Next up — understanding who your clients are and why that’s important in creating a customer-centric advisory practice.