In today’s digital age, online reviews wield immense influence over consumer decisions across every industry, including financial advisory services. Yet, many advisors adopt a passive “wait and see” stance toward leveraging online reviews as part of their marketing strategy. This approach, however, carries significant risks that could impact an advisor’s online reputation and competitive edge. As consumers increasingly rely on reviews to guide their choices, advisors must actively engage with this trend to safeguard their digital presence and attract new clients effectively. Let’s explore why adopting a proactive approach to online reviews is crucial for financial advisors in today’s competitive landscape.
The Risks of A “Wait and See” Approach to Online Reviews for Financial Advisors
There’s around a 98% chance that anyone reading this post has leveraged online reviews as a consumer. And if you’ve spent any time thinking about how you acquire clients for your own financial advisory practice, maybe the idea of online reviews has crossed your mind in that context as well.
Since the 2022 SEC Marketing Rule went into effect, the overwhelming majority of financial advisors can take advantage of online reviews (testimonials) in a compliant way. If you aren’t in the habit of regularly reassessing your marketing strategies and tactics, maybe you have passively put this marketing opportunity into a “wait and see” category. Let’s look at why that could be a risky approach.
Consumers Love Online Reviews
Think about browsing online for products on Amazon, lodging on Airbnb, or healthcare professionals on a hospital website – it’s hard to remember how we made any decisions before online reviews were abundant and readily available.
Consumers seek out online reviews in just about every industry. In fact, a 2023 BrightLocal survey found that 98% of consumers “at least occasionally” read online reviews about local businesses, and 76% of consumers “always” or “regularly” read online reviews when researching local businesses. There’s no reason to believe that searching for financial advisors will be exempt from this trend.
Advisors Cannot Prevent People from Leaving Reviews
Regardless of whether advisors plan to use testimonials in their marketing efforts, clients can write reviews of their advisor online if they choose. Google Business Profiles often get created automatically and without any input from the business. In addition, there are also already several “directory” sites online for financial advisors. These sites are highly motivated to collect reviews about those advisors, as the companies behind these sites know that reviews carry a lot of influence with search engines and consumers alike.
If any of these sites can gather a critical mass of advisor reviews, they are likely to be rewarded with significant increases in website traffic to these directory sites. So, it is reasonable to expect that they will be very creative about trying to entice consumers to write reviews about their financial advisor experiences.
In most cases, when a review shows up on one of these sites about an advisor, it’s going to be there indefinitely for the whole world to see. This situation is fine if the review is positive and complimentary (as it is likely to be), but it becomes problematic if the review is lukewarm or negative. Worse still, most of these sites don’t have a mechanism for ensuring that the people writing the reviews are/were actual clients of the advisors being reviewed.
Three Main Risks
Given the landscape described above, there are three primary risks associated with adopting a passive “wait and see” approach towards online reviews:
- A negative review could define an advisor’s online reputation for a while. If you have a concern that a client or former client might have an ax to grind, there is always the remote chance that he/she could air dirty laundry in the form of an online review. With a totally open review site, a competitor or former employee could theoretically do the same thing
- Directory sites begin to amass influence. If a directory site is successful at collecting a meaningful number of reviews about a specific advisor (or that advisor’s competitors), that directory site begins to have significant bargaining power with the impacted advisors.
- Competitors could get a significant head start. Taking a “wait and see” approach is implicitly conceding that others will get a head start on amassing online reviews. Under this scenario, in 6-12 months, advisors may find themselves at a significant disadvantage in the world of online reputation.
Imagine a prospect receives referrals for both an advisor and that advisor’s chief competitor. If a prospect sees dozens of positive reviews for the competitor but finds nothing when they look for reviews for the advisor, the “wait and see” advisor will be fighting an uphill battle to win that business. A 2021 Financial Planning Magazine study reiterated this concept, reporting “nearly half [of respondents] removed advisors from consideration based on what they saw or couldn’t find in their digital footprints”.
Don’t Worry, Don’t Wait, Get Started!
Instead of worrying or wondering about when online reviews will show up for your practice and what they might contain, advisors can take steps today to ensure that the voices of their happy and satisfied clients are captured and displayed on their own websites. Not only is this a great “risk avoidance” approach, but reviews are also one of the most powerful marketing assets available to advisors.
Advisors can eliminate the risk of a single bad review having an outsized impact on their online presence and boost their overall digital marketing footprint with this one easy marketing initiative. Online reviews immediately boost advisors’ SEO and give consumers the information they need to select an advisor that’s right for their needs. Don’t worry, just get started!
