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by Jack Waymire
on December 18, 2017

Tags: Digital

New client acquisition for many RIAs, especially the thousands of firms with less than $250 million in Assets Under Management (AUM), is a frustrating experience that limits revenues, income and the future value of their businesses. Successful marketing strategies are virtually non-existent, which forces these firms to rely on a trickle of referrals to help offset normal client attrition and produce business growth.


The past eight years has masked the trickle with market appreciation, reinvested income and new money from current clients. But, as they say, the good times will not last forever. Eventually, RIAs will have to add new clients to grow.


The good news is the Internet provides an affordable way to expand smaller RIAs. That’s because it does not care about the size of firms. The Internet’s productivity is measured by the digital-marketing strategies that are used to produce online visibility, website traffic and websites that convert traffic into qualified leads.


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New Client Growth is Going Sideways


Statistics show a picture of near stagnation for many RIAs. According to the 2012-2016 Fidelity RIA Benchmarking Studies, organic growth for RIA firms in 2015 was 6.7%, the lowest level in five years. The biggest reason for the drop from prior years was a decline in new assets from new clients.


This stagnation can be attributed to the following factors:


  • While acquisitions may provide a source of asset growth, taking on another book of business can come with a high cost. Cultural differences may materialize. There’s also no guarantee that the legacy clients will stay with the buyer.
  • Market appreciation increases AUM, but financial advisors have no control over these forces. One down year can offset years of asset growth.
  • Many RIAs use lead-generation services. The problem is that these leads are not exclusive and investors may submit data on multiple websites. You’re not the only one at the dance, so to speak. The market for these leads is intensely competitive. It can be a matter of who gets to the lead first.
  • Relying on referrals for business growth has its downside. There may be very few of them and you still have to win the relationships. A small percentage of advisors receive enough referrals to offset losses. This is a passive sales strategy that surrenders control of the pipeline.


At this point, an active digital-marketing strategy isn’t just a “nice to have” strategy for smaller RIAs. It’s almost a necessity to compensate for the client attrition that inevitably happens. There’s no guarantee that clients will stay with RIAs forever. They die, relocate and terminate relationships for any number of reasons. In order to grow, RIAs need a sustainable, affordable method for growing assets that doesn’t depend on the performance of the stock market.


Investors are using the Internet to find professionals who will impact their financial security. Your strategy has to overcome their predispositions to be cautious.


The Power of the Internet for RIAs


According to the 2016 Fidelity RIA Benchmarking Study, RIAs are still behind the eight ball when it comes to digital marketing. More than half of them don’t have a strategy in place or know how to develop one. That’s because they have relied on outbound marketing tactics (telemarketing, direct mail, seminars) for decades. Less than one-third of firms even knew much about digital marketing.


Success on the Internet is not based on AUM. It is based on your commitment to a digital marketing strategy.


Given the lack of activity, the opportunity is ripe for smaller RIAs that want to create a marketing advantage for themselves. The Internet is leveling the playing field and can be a very equalizing force for RIAs that can afford digital marketing. It is the power punch they need to get the jump on the bigger firms.


Let’s look at what an RIA needs in order to participate in digital marketing.


  • A marketing strategy – Most RIAs don’t have one. Given the economics of a small RIA firm, the pockets for this type of spending aren’t very deep. In an effort to pinch pennies, most RIAs will throw money at a wide range of marketing tactics that don’t work – AdWords, template-based websites, drip systems. But this is foolish. RIAs need marketing strategies that produce positive ROIs.
  • A quality website – Many financial-advisor websites are saying the same thing with little differentiation from one to the next. Moreover, they are laden with distractions and boring content that turns off would-be clients. Being able to convert Internet traffic into leads depends on the website’s ability to increase visitors’ time on the site and compel them to give up their anonymity and submit their contact data. 
  • Content marketing – In order to produce relevant white papers, articles or blogs that people will actually read, content must be produced by a professional-caliber writer who understands investors and the business of the RIA. To be effective, the content must meet Google standards for original content and number of words (1,000+) and be something that people actually read.
  • Social media – Someone must post content to the firm’s social sites and monitor any engagements or indications of interest. Free offers should also be integrated into your social strategy. 
  • SEO – Advisors can take advantage of ranking high in Google results for hundreds of long-tail keywords that investors use to find financial advisors. For example, “Financial Advisor Dallas Texas CFP.” Or the keywords can relate to a question that leads an investor to an advisor who  can provide the answer: “Can I donate to a charity to avoid capital gains taxes?”
  • Local SEO – This is the low-hanging fruit. It is easier, faster and less expense to increase RIA visibility in local markets. This directory-based strategy also impacts the RIA’s visibility in Google.


Why Outsourcing Makes Sense

Most smaller RIAs don’t have the in-house resources to develop, implement and manage an effective digital-marketing campaign on their own. The cost of hiring an in-house team with all of the specialized skills would be prohibitively expensive.


Moreover, many advisors are discouraged by failed attempts at Internet marketing in the past. Typical experiences include low Internet visibility, low traffic-flows to websites and a website’s failure to convert traffic into leads. While this is unfortunate, it’s not unfamiliar to digital marketing companies inside and outside of the financial-services industry.


As the saying goes, digital marketing is a marathon and not a sprint. But, the effort produces new clients for years into the future.


Outsourcing to an experienced team of professionals who have successfully developed and implemented digital-marketing lead-generation platforms is a less expensive solution, but it is not cheap. On the other hand, an investment in digital marketing can pay for itself in the first year – all it takes is a few new clients.


The $800 Million Digital Marketing Success Story


There once was a financial advisor who lived in a shoe, and had so many digital-marketing leads that he didn’t know what to do …


For the advisors reading this article who are unconvinced digital marketing works, here’s an advisor success story. This advisor has $800 million in AUM and has never met 80% of his clients face-to-face.


Not only did he master digital marketing, but he also mastered virtual marketing that he used to convert leads into clients.


How is this possible? He built visibility on the Internet by consistently writing and publishing high-quality content that resonated with investors. He even wrote a book that he used to increase his credibility and trustworthiness. Then he used SEO marketing tactics to increase the visibility of his blogs, articles and white papers. Lastly, his website was designed to produce leads.


The results were 32 new clients per year that produced approximately $280,000 of new revenue for a digital-marketing expense that was less than $60,000 per year. Digital marketing works, but it is not for the faint of heart. It takes the right strategy, a marketing budget, a team of experts and perseverance to be successful.


Summing it up: Making the Investment Work


Spending money on marketing isn’t an RIA’s favorite thing to do, but it’s the only way to break out of a vicious, no-growth cycle. Given the outbound alternatives (telemarketing, direct mail, seminars, etc.), Internet marketing is an investment that pays dividends for smaller RIAs – it is the great equalizer.


Digital marketing is an investment that produces continuous revenue for years.


The digital marketing equation is simple: Internet visibility produces traffic, traffic produces leads, and leads produce new clients and revenues.


6 tips that help financial advisors increase internet leads and results