Business tips from fraudsters
Postcards from the edge
In most cases, financial frauds are referenced by compliance experts for instructive purposes. Not to explain how to successfully defraud insurers, banks and clients but to illustrate the consequences of misconduct. Generally, ASIC's Media Releases or Adele Ferguson's latest column is used as a potted morality play for an audience disinterested in compliance.
Fear sells. It's therefore entirely reasonable that sins, scams and scandals are used to engage, educate and entertain. Unfortunately, it's probably unreasonable to expect that people inclined to, or considering, misconduct will be dissuaded by the possibility of consequences (either administrative, financial or custodial).
So, are there positive lessons we can take from scams, scandals and other people's failures?
A recent podcast interview with independent financial planner, Justin Brand, touched on an investment fraud broken through the combined efforts of ASIC and the AFP. According to SMH's Jorge Branco and Amy Mitchell-Whittington, it was the "cold calling scam that allegedly milked $30 million out of about 2000 victims across Australia". The alleged fraud was extensively covered by the ABC and Courier Mail so we won't labour the details or reiterate that no financial planners were involved in this scam. Without seeming to endorse their conduct in any way, I have to acknowledge that the alleged fraudsters' understanding of consumer habits and digital media was impressive.
Despite the inevitable march of consumer technology, I've noticed that many financial advisers still underestimate the role their website plays in reassuring prospects and establishing both credibility and legitimacy. If you're convinced that a compelling digital presence will have little, if any impact, on the growth and success of your business, then enjoy the commercial irrelevancy you've voluntarily embraced. A website may not generate leads (or generate enough leads to justify your investment) but it validates you far more effectively than your professional designation.
It's important to appreciate that consumers buy differently than how they bought ten years ago. Credibility is established far differently now to how it may have been when you were first authorised. Advice is a “credence good” and most consumers lack the time, inclination and capability to accurately assess the quality of the financial service they're offered. So they rely on brands and, as trusted brands become tarnished, they look for social proof. The first, and often the only, inquiry made by many consumers is to visit the adviser's website.
A “credence good” involves an asymmetric relationship where the purchaser lacks the information to accurately assess the worth of the good and where the value or real cost of the good will often not be known for some time.
There is a wide body of research that suggests that most consumers' decisions to proceed are based, primarily, on the results of the initial on-line search search. While one might criticise the superficiality of this approach, the consequences and implications of it need to be properly appreciated. Not only is an online presence very important for advisers but the quality, construction and currency of their websites is critical. In reality, social proof is becoming an increasingly important part of consumers’ selection and engagement processes. A digital information search is a significant5 and ubiquitous component of the modern consumer’s decision making process; most consumers routinely validate their buying decisions (or crystallise their preferences) through internet searches, a review of the Provider’s website and by reference to their own social networks.
Your digital presence
Your website, and your digital presence, is far too important for you to ignore. As much as consumers may be told to check out their adviser on the Moneysmart site, their Association website or a private service, most consumers will not do so. They'll google you and visit your site. They'll check out what others say about you. If your site is bad, if your content is un-engaging and if your testimonials are middling or non-existent, they'll never become a prospect.
If you don't have a site, most consumers will presume you're not a legitimate business.
You no longer have the luxury of being invisible. Instead, you're expected to be compelling and active.
If you have aspirations of building a successful financial planning practice, a compelling site is now a 'must have' and not a 'nice to have'. If you don't have a site, build one or engage someone to do it for you.
Five website issues
If you already have a site, here are five things you should immediately check:
Is your site mobile responsive? Mobiles and tablets have replaced laptops and desktops as the search tool of choice and you need to ensure your site is properly rendered for mobile consumption. Services, like squarespace, do this automatically.
Does your site correctly present you and your services? ASIC have publicly admitted using technology to identify non-compliant sites and drive surveillance. Ensure both your Licensee and your capacity is correctly presented. Is it clear what services you provide and how you charge? Does your site explain how people can contact you? Think about what your site says about your professionalism and approach? Proofread your content, correct the spelling errors and standardise your voice. While you're at it, review the profile photo you've used and ditch the crappy selfie you took at your desk.
Is your content relevant, engaging and compliant? ASIC published RG234 for a reason so you've no excuse for publishing content that contradicts the law or their expectations. Writing engaging, useful and relevant content is harder to address, but there are businesses and content experts that can assist you.
Is your site beautiful? You don't need to obsess over minimalist design trends, UI tips or hot fonts, but Apple has conditioned everyone to expect beautiful design and intuitive functionality. Look at the images you've used and the layout you've chosen. If you're site looks like it's been designed by a colour-blind, self-loathing alcoholic who missed too many ESL classes, it won't establish your credibility. Consider the images you're using and ditch the watermarked photos you've cribbed from google images. Check out the alternatives available from Shutterstock, Getty Images or Adobe.
Do you invite, and publish, feedback? You're probably conditioned to ask for referrals and testimonials from clients. That's a great start, but consumers looking for social proof are looking for real reviews from real people. Encourage your clients to be open and authentic in their reviews and resist the impulse to edit or eliminate bad reviews. Consumers and regulators are well aware that reviews can be 'fixed' to present an idealised version but appreciate that too many bad reviews can persuade prospective clients to go elsewhere. Studies suggest that around 70% of consumers check the reviews first, so the best long term play is to embrace transparency and deliver exceptional service.
In an increasingly crowded and competitive environment, your website plays a crucial role in establishing your legitimacy, credibility and capability. Don't ignore it.