Independent financial advisors need a clearer way of communicating to investors what makes them different from other providers of financial advice, while keeping in mind what investors really care about: duty, safeguards and professionalism, according to the founders of Advizent, a membership organization of RIAs.

Co-founder Steven Lockshin believes the advisory business needs to better articulate a "core set of attributes" which make it clear that it will put clients' interests first.

"Research has shown that investors are confused by terms like 'fiduciary' and 'suitability' and a range of other industry jargon, " he writes in a blog. "Many do not understand the various credentials of the industry and therefore assign little value to the letters after an advisor's name."

Achieving growth in a competitive market

Advizent points to data from Cerulli Associates, which indicates that RIAs are expected to occupy 20 per cent market share by 2013. Yet, according to research from TD Ameritrade, a staggering 84 per cent of US consumers don’t know what an RIA is.

Lockshin and co-founder Charles Goldman therefore believe independent advisors must make a stronger and clearer case for why they are the right choice for investors - especially in a market with "this much opportunity." Investors currently have $12 trillion placed under the management of financial professionals.

"While regulators and industry insiders debate words like 'fiduciary' and 'suitability' or principle versus rules based standards, investors are left struggling to understand who is on truly their side," says Goldman. "Those issues are important to the industry overall, but if advisors get mired in too much technical detail, their message to consumers will be lost.”

Accordingly, Goldman recommends that advisors should focus "broadly on standards of care in simple language," to reassure investors that they are on their side. "It is a simple concept that investors can understand, relate to, and value," he says.