Written by Charlie Conron on September 17, 2018
The status quo is changing. Client expectations are rising, regulations are tightening and the pace of technological change is accelerating. Advisors everywhere are being force-fed discussions of "disruption." But does disruption mean advisors have to fight back? Evolve? Do they even have a choice?
Read on to see how the financial services landscape is changing, whether advisors are facing transformation or disruption, and what they can do to meet the increasing expectations of the new client.
(Note: this blog covers the basics, but for even more on thriving in the new paradigm check out my How the New Wave of Tech is Making Old School Sales Obsolete webinar with Ray Adamson, Chief Customer Officer of Kronos Technologies)
The truth about disruption
First off, let’s take a closer look at disruption and what it really means. For starters, technology on its own is not the real disruptor. Losing focus on the customer experience is the biggest risk to any business—and technology only disrupts when it causes that loss of focus. On the other hand, technology can be a positive form of disruption if it is used to raise the bar and improve the customer experience.
Take the most classic example of disruption—the horse and buggy vs. the car. Not only did mass production of Model Ts kill the buggy industry (which some say could have pivoted on their real skill of leather work) but it took down all the related industries as well, right down to the whip maker. Not really a demand for that whip in my Model T.
Today Tesla is disrupting/evolving the automotive world by, not just introducing a new customer experience that exceeds what clients thought possible in the automotive industry, but also redefining how they will power their cars—which is shaking up the energy market. Elon himself thinks the factory that built the Model T and the Gigafactory are the real success, not the car itself.
And that’s interesting because it shows that technology is not always a physical gadget (the car.) In a broader sense, it also includes knowledge of techniques (the factory and manufacturing process.)
Old Way vs. New Way
In our industry tech has made finding prospects and researching their needs more accessible than ever. In fact, according to LinkedIn data:
- 62% will look for an informative LinkedIn profile when deciding whether to work with a sales professional
- 69% of millennial buyers are more likely to engage with a sales professional who has a professional social media presence
- “85% of people said they would use the Internet in some way to purchase a life insurance policy.”
This is how disruption presents itself in our field. The truth is your customer has already evolved and their expectations around good customer service and how they want to be treated are increasingly high because of innovations in the customer experience in other industries.
Disruptive companies (like Apple, Uber, Amazon, Netflix) all offer a better experience for the client by letting them transact on their own terms and offering a level of convenience that made it easy to make decisions on the clients' timeline. It largely allows customers to get an education about products based on their own preferences and communication channels.
With that in mind I think we can all agree that embracing the client experience using technology is the best way to deliver what the modern consumer expects. Consider that in tech circles people talk about the idea of the “centaur,” which describes the marriage of technology with human expertise—creating a more wonderful whole (like the half-horse, half-human mythical creature.)
Here’s what we see: Technology is transforming the sales profession in every facet—from the way leads are generated, to the conversations that happen once the “digital handshake” is made. To a large extent, technology is accelerating connections, shortening sales cycles and bringing a new level of transparency that is unlike anything buyers and sellers have ever experienced. How we react to this industry will determine the future of the industry.
With that idea in mind, take a look at your practice and think about whether you are a tech company or an insurance company/agency/advisor? Or can you be both? In your own specific case, can you marry the two to provide the client the best experience possible?
If you can’t, you need to find a partner who gives you that centaur capability.
So what should you do? In my webinar I provide you with specific examples of tools and apps to make each strategy work, but here’s a quick list of some of the approaches you can use to improve the customer experience.
- Clients will judge the quality of your service by how professional your website looks.
- Be a thought leader and share the years of expertise you have built up in the form of content that answers your clients' biggest questions
- Use LinkedIn to target your specific audience (physicians, people changing roles, vets) and expose them to all your thought leadership and content marketing.
- Podcasts or webinars are an excellent way to capture people's attention.
I remain very bullish on advisors. But there has to be a willingness for change and collaboration (not industry fragmentation) on all distribution levels, otherwise it will be hard to stay in the game. There is no question the industry is evolving rapidly at the moment. However, I think how the current distribution model reacts to technology will determine how “disruptive” that evolution will be. We’re still in a sweet-spot in terms of the evolution of the industry, where technology can be used to create a highly-personalized experience and help better communicate our value proposition to more people.