Editor's Note: This post was originally published in September 2016 and has been completely revamped and updated for accuracy and comprehensiveness.
Outbound financial advisor marketing strategies are often referred to as numbers games. Advisors make 100 cold calls, talk to five people, and convert one into a client. This process is called outbound marketing when financial advisors initiate contact with investors. In 2024 this marketing process is largely obsolete due to Call ID and other types of filters. Today, it is very difficult to cold call investors and produce meaningful results. It is much easier to just pay a third party to produce leads for you.
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Financial advisors don’t have to be mathematicians to figure out the outbound marketing game is an expensive, time-consuming process that produces very little return for the advisors time or money.
Sales Success
Advisors have to be effective salespeople to execute numbers games that include: Telemarketing, direct mail, snail mail, affinity, networking, and seminars.
This process of adding new clients is complicated by the fact that a high percentage of financial professionals are not sophisticated salespeople. They are intellectual, quantitative, and analytical. Their expertise lies in financial planning and investment management. These are attributes of great financial advisors and not great sales professionals.
Tip #1: If firms can afford it, hire a marketing specialist. If they cannot afford a specialist, consider using Inbound Marketing to produce warm leads.
Financial Advisors Hate Marketing?
Hundreds of advisors have told Paladin they hate marketing and believe it is a necessary evil to grow their firms. Consequently, initiating contact with investors they don’t know is at the bottom of their priority list each day. Case in point, they avoid marketing by never quite getting around to it.
Consequently, these firms are dependent on appreciation and reinvested income to grow their assets. The only source of organic growth is referrals which are few and far between.
Tip #2: Hire that specialist or use Inbound Marketing to create qualified leads.
Financial Advisor Leads & Prospects - What is the Difference?
There is a big difference.
A stranger becomes a lead when financial advisors have the investors’ contact information. There is no progress in the sales funnel until there has been contact that produces a common interest.
For example, the financial advisor provides the planning and investment services that the investors are seeking. Plus, the advisor serves other clients who are similar to the lead - this investor is about to retire and the financial advisor serves pre-retirees.
Meanwhile, the investor has to meet the requirements of the financial advisor. For example, fit a particular demographic and meet a minimum asset requirement.
Tip #3: Financial advisor CRM systems should differentiate between suspects and prospects. Advisors need separate messaging based on the status of the lead, prospect, or client.
Disruptive Financial Advisor Marketing
Most outbound marketing strategies are based on cold relationships. Advisors try to establish contact with people who have not shown any interest in talking to them.
The most disruptive strategy may be a computer-generated telephone call during dinner. It is disruptive and it produces a rejection rate that approaches 100%. For example, direct mail may have a return rate of 2% and telemarketing results may be 1% or less.
A lot of time-wasting rejection for very low returns. When time is money it is also an expensive process.
Tip #4: Not only is Outbound Marketing for financial advisors expensive and time-consuming and is now virtually obsolete.
Inbound Marketing for Financial Advisory Firms
If you are a financial advisor and you own your brand and website then one of your alternatives is Inbound Marketing - that is, investors initiate contact with financial advisors. This is not an invasive process because it is initiated by investors who are seeking financial advisors or financial information.
The Internet is what makes inbound marketing possible. Investors can use it to find, screen, and contact financial advisors. And, they can retain their anonymity until they are ready to schedule interviews with advisors or download an eBook.
What About Financial Advisors Who Hate Cold Calling?
Some professionals may own brands and firms and other professionals work for these firms. In the latter case, they cannot rely on their own inbound marketing tactics, but they can subscribe to services (WiserAdvisor, SmartAsset) that use inbound marketing tactics to produce leads that they sell to financial professionals and firms.
The Financial Advisor Website Revolution
Every financial advisor has a website for a reason. It is an online sales brochure that provides information about the firm: About Us, What We Do, Who We Serve, etc.
Websites are the most important sales tool that financial advisors can use to produce leads for their firms. How important are websites? Paladin Research shows 82% of investors will visit financial advisor websites and 64% will Google search financial advisor names. What they see on the Internet determines who they contact for initial interviews.
Conversion Rates
Most advisors have websites because every other advisor has a website. 76% of advisors have told Paladin they are dissatisfied with the results (leads) that are produced by their websites.
This is an important issue that should be addressed by financial advisors. Their websites act as online sales brochures, but they are not designed to convert visitors into qualified leads.
Tip #5: This is a big mistake. If advisors want improved results, they have to do what it takes to improve their Internet visibility, website traffic, and website conversion rates.
Solutions for Financial Advisors Who Hate Marketing
Inbound Marketing solves a lot of problems for financial advisors – who happen to work in the most competitive industry on earth. There are thousands of advisors who provide similar services for similar fees. This makes it difficult for investors to determine which advisors are their best choices. The Internet and financial advisor websites can provide the answers they are looking for.
The Internet is a game-changer. At any point in time, only a small percentage of investors are seeking first-time or replacement financial advisors. There is a good chance they will use the Internet to learn more about advisors, find advisors, and initiate contact with advisors who look interesting.
This is the foundation of an inbound marketing system for financial advisors that will produce superior results compared to old, antiquated, outbound marketing strategies.
