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Best Marketing Practices for Small RIA's That Want to Grow Their Financial Advisor Businesses in 2020

Passive Growth Is Not A Strategy

The past ten plus years have been very favorable for financial advisors. They have watched their assets under management and advisement soar due to market appreciation, reinvested income, and new money from current clients.

This is the comfortable, easy way to grow firm revenues that are generated by asset-based fees. New clients are not required to produce this form of growth.

On the other hand, passive growth is also subject to stock market declines and client attrition. What goes up can also go down and clients die, relocate, and terminate advisors for a myriad of reasons.


Organic Growth Strategies

Adding new clients is the best form of growth because, not only do revenues increase, you:

  • Offset attrition with new clients
  • Spread your risk of attrition across a bigger client base
  • Benefit from more market appreciation
  • Increase the value of your firm

There are a lot of benefits, but there are also three challenges.

You need a:

  • Strategy for producing a consistent flow of leads to your firm
  • Marketing budget that supports this strategy
  • Set of sales skills so you can convert leads into clients

Top 6 enhancements to make on your financial advisor website in 2020


Top Quality Advisors & Planners

The need for sales skills is a real conundrum for many small financial advisory firms. That’s because the senior advisor may also be the designated salesperson.

There is a lot of evidence that the best financial planners, advisors, and managers are not necessarily the best sales professionals.

In fact, their skill sets can be diametrically opposed to each other. For example, the best planners and advisors may be intellectual, quantitative, and analytical. They may even view sales as a necessary evil and not a good use of their time. These are not the characteristics of great sales professionals. 

The best sales professionals have exceptional relationship building and management skills. They would rather be talking to prospects and not be sitting at a computer all day. They like the competitive win/lose nature of selling. In fact, a lot of sales professionals played competitive sports in school. They will follow-up with prospects for as long as it takes to convert them into revenue-producing clients. And, rejection rolls of their backs like it never happened.


A Major Conundrum

Why should an RIA spend money on marketing professionals if the firm does not have an effective strategy for converting leads into prospects, and prospects into revenue-producing clients?

From a purely rational perspective, they shouldn’t. The firm is wasting money on salary, benefits, and expenses if the sales professional does not have anyone to talk to.

It is also a little naïve to assume advisors will produce their own leads if their only alternative is Outbound Marketing (more about that in a minute).

This is a two-way street. A firm with these characteristics could also be squandering resources if it spends money producing leads, but does not have the necessary skills inhouse to convert them into revenue-producing clients?

Unfortunately, we see this a lot when we talk to RIAs that want to grow but cannot afford to fund a marketing strategy that can produce new clients.


Why Outbound Marketing is Obsolete

What happens when advisors are responsible for producing their own leads and firms do not provide any support?

It used to be most advisors used Outbound Marketing tactics to initiate contact with investors. The most common forms of Outbound were cold calling to minimize cost and direct mail.

Most advisors, in particular higher quality advisors, have abandoned Outbound Marketing for the following reasons:

  • It keeps getting tougher due to Caller ID and spam filters
  • It is increasingly expensive and time-consuming
  • It is not the highest and best use of the advisors’ time
  • Rejection rates approach 100%

When advisors are responsible for producing their own leads their two primary choices are Outbound Marketing and buying leads from third parties. The advisors’ firms may not be involved in the production of leads even though they are the primary beneficiaries of new client revenues.


Inbound Marketing

The alternative to Outbound Marketing is Inbound Marketing. This form of marketing is relatively new to many financial advisors, but has several attractive features:

  • Investors can use the Internet to find and research advisors
  • Investors initiate contact with advisors
  • Internet visibility increase brand awareness and produces leads
  • Leads tend to be very high quality
  • Close ratios are better when leads are higher quality

Why does Inbound Marketing produce high-quality leads? Because investors spend time on advisor websites learning more about them before they make the decision to contact them. They are not necessarily pre-sold, but they must have liked what they saw to get them to give-up their anonymity and submit their contact information.

Unfortunately, many advisors judge the potential of Inbound Marketing based on the performance of their current digital marketing efforts (online visibility, website traffic, and website conversion rates). They have little or no presence on the Internet so there is limited traffic. And, their websites are designed to act like online sales brochures.

How does marketing insanity impact financial advisor firms?


The Referral Game

What’s left if Outbound Marketing is obsolete and advisors don’t use Inbound Marketing?

Many RIAs claim their primary form of marketing is referrals from current clients, friends, and family. Not to be too cynical, but is this tantamount to waiting for the telephone to ring?

There is a version of the Referral Game that can produce leads for RIAs. It is when the referrals come from Centers of Influence (CPAs, attorneys). But, this form of marketing requires some sales activities to build a network of referral sources. Also, according to the AICPA, 40% of CPAs currently provide planning and in some cases investment advice and services.

Notwithstanding the above, most advisors do not receive enough referrals each year to offset the various forms of attrition and produce positive organic growth rates for their firms.



Why is marketing financial advice and services so difficult? There are several reasons that may create some monumental problems for advisors that are not prepared to deal with them: 

  • It is one of the most competitive industries in America 
  • Thousands of firms and hundreds of thousands of advisors/reps
  • Many firms market very similar services for similar fees
  • There is very little differentiation between most firms
  • There are a lot of big firms with deep pockets
  • Most investors do not know how to evaluate firms
  • Investors tend to select firms that make them feel safe

Process of Exclusion

There is an even bigger competitive issue than big, brand name competitors. It is the process that investors use to select financial advisors. We call it the process of exclusion. 

As noted, most investors do not know how to select the best financial advisors. This is one of the reasons they give for gravitating to brand names. A name they know is safer than a name they don’t know.

This creates a hurdle that must be overcome by the advisor firms.

So how do most investors select financial advisors? They use a process of exclusion. For example, they use the Internet to find and research eight advisory firms. They contact the four firms they want to interview. They select the one they like the best.

How did the investors get from eight to four to one? They used a process of exclusion that was based on variables that were important to them. For example, at the eight-stage, they were looking for advisors with strong teams of professionals. They excluded firms that did not profile strong teams on their websites.

All advisors have heard other reasons for exclusion: Too expensive, too far away, too big, too small, etc.

The key to effective marketing is to never get excluded at any of the three stages: Screening, interviewing, and selecting. Advisors literally want to be the last person standing.

There is an irony. Advisors with weak websites and online presence are being excluded at the screening stage and they don’t even know it.


How Important is a Marketing Budget?

We believe a lot of smaller RIAs do not have significant marketing budgets because they do not have effective marketing strategies. It is a lot like the cart and the horse, and which comes first the strategy, the budget, leads, or the sales professional. For example, there is no reason to have a strategy if there is no budget to fund its implementation.

The big question is, if there is a strategy and a budget, how is the money going to be spent? The answer should be to implement the strategy – the production of leads and the professional converting the leads into clients. 

We believe there is no reason to hire an expensive professional if there are no leads. So strategy #1 is to fund activities that produce leads that are processed by existing professionals:

  • Outbound marketing (cold calling, direct mail)
  • Inbound marketing (SEO, SEM)
  • Referral-based marketing (COI’s)

The next question is who follows-up with the leads that are produced by a firm’s marketing strategy. One of the firm’s principals or an employee (sales professional) at the firm?

Market budgets must fund the production of leads. There may not be a funding requirement for a sales professional if a firm principal can fill that role. There could be a need for a professional down the road if the lead volume is sufficient to require a dedicated resource.



We believe it makes sense to spend marketing dollars on the production of leads that go to current firm principals. There is no reason to incur the expense of a sales professional if there no leads. And, it would be naïve to assume this professional will produce leads without some support from the firm.

We recommend Inbound Marketing as the most cost-effective strategy for producing leads, building brand awareness, and increasing online credibility. If this strategy is producing a steady flow of new leads, leave it alone, until the firm principal runs out of time. At this point, the leads should be producing the revenue small firms need to hire a full-time marketing professional.

Small firms are not destined to stay small forever. However, there is a series of smart choices they must make that will produce new clients for their firms:

  • A strong presence on the Internet (so investors can find you)
  • A compelling website (so investors contact you)
  • An effective system for turning leads into prospects (mutual interest)
  •  A sales capability that turns prospects into clients (revenue)

In other words, build a strong foundation first that will produce a consistent flow of new leads to the firm. Then deal with who does the selling – a current principal at the firm or a full-time marketing professional.

About Paladin

Paladin is a team of digital marketing professionals with more than 100 years of collective financial industry experience marketing our clients' services to individuals, institutions, and financial advisors. Paladin is a boutique agency that was founded in 2003 to provide game-changing digital marketing services to a limited number of firms and professionals in the financial service industry. Our services range from designing and developing custom websites to providing SEO, SEM, and Fractional CMO services. Want more information about our digital marketing services? Email your request to Paladin’s CMO: Jack@PaladinDigitalMarketing.com

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