Building Trust With Investors Through Digital Services

Updated: Jun 12

Here is our compilation of research combined with our personal input on how to develop trust with your current and future clients online. As we move more into the digital age, a complete set of client services requires both in-person and digital efforts.

Digital natives - the next generation of investors:

The digital generation which spans multiple demographics and represents more than 75 million people with $27 trillion in assets—is differentiated by their broad adoption of technology, particularly in their deeply ingrained use of digital and social channels in almost every aspect of their lives.

These digital behaviors will have a growing impact on the relationships these investors have with financial institutions and advisors—relationships that are currently undermined by a lack of trust in the financial system.

75% of tech-savvy advisors use of digital and social channels into their daily lives. The majority (60%) has daily contact with clients through social media, some likely flouting their firms’ current policies against this type of activity.

With 54% citing that they found or converted clients using these channels, it’s clear that the tech-savvy advisor realizes the importance of digital tools in attracting and retaining clients, and understands that this is increasingly becoming a key differentiator for success.

The relationship between digital natives and advisors:

The erosion of investor trust since the recent financial crisis has led to an increased need for investors to understand and feel in control of their investment decisions. Yet, advisors tend to seriously overestimate investor knowledge, believing 42% are extremely knowledgeable about investing, while only 12% of investors actually see themselves as extremely knowledgeable.

As a result, what FAs intend as clear and valuable communications to investors are often perceived as promotional—and possibly beyond their level of investment knowledge. Investors are seeking education, and if advisors don’t offer what they need, they are likely to look for that information elsewhere, resulting in missed opportunities.

Additionally, FAs tend to misunderstand their clients’ investment style, assuming their clients want to invest more aggressively than is often their preference. This is particularly true with Millennials, who are by far the most conservative in their attitudes toward investing

Bridging the gap with social tools:

Good news coming out of our research is that the erosion of investor trust can be addressed through increased—and skillful—use of digital/social tools. They offer FAs unprecedented opportunities for more frequent interactions with their clients, helping them forge deeper, stronger relationships. They also allow FAs to draw from a broader, richer referral and acquisition network.

Responding to their clients’ desire for investment education—and their openness to using digital tools such as virtual meetings, online seminars, and online communities—FAs can explore the effectiveness of various digital channels for delivering this information in an engaging environment.

Digital tools can be equally important for creating digital social networks within financial firms, providing channels for connecting FAs with specific expertise and providing feedback on work-related issues. These internal social networks, which are becoming increasingly prevalent, can also help FAs become more comfortable with the use of digital tools for connecting with clients and referral sources.

When asked whether they would expect to use an internal social network provided by their firm, 85% of FAs agreed that if you build it, they will come. There is a growing perception among advisors that digital/social tools will become highly functional table stakes for both external and internal communications—and for current and future career satisfaction and success

What results are tech-savvy advisors seeing?

Survey responses demonstrate advisors are having significant success using these channels for client acquisition, with 40% indicating they’ve gotten new clients through Facebook, 25% through LinkedIn, and 21% through Twitter.

Social media utilization has also helped FAs achieve their key professional goals. Among all FAs surveyed,

77% affirm that it helps with client retention, 74% agree that it helps them increase assets under management, and 73% say it has led to an overall increase in client interactions.


Consistent and effective use of digital tools and social channels is becoming increasingly necessary for financial advisors to remain relevant to younger investors who already represent a large and viable market segment. Millennials, who are now most skeptical toward FAs, will drive this trend as their wealth— and importance—grows.

Financial advisors with digital savvy are successfully using digital tools for attracting, building, and retaining relationships with younger investors. They understand there are not only clientfacing advantages to these tools, but also benefits inside their professional spheres. It is critical, however, that they understand and begin to address the perception gaps that may be undermining their effectiveness with investors. The use of digital tools and social media offers solid opportunities for delivering the financial education their clients want and need, and for building stronger, more robust relationships with multiple touchpoints.

Financial firms need to evolve their businesses to serve the needs and preferences of younger investors, whose ranks will soon dominate the total investor population.


Lukas G. from ITB

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