At the risk of stating the obvious, financial advisors have a major challenge when they market their services on the Internet. They all look alike to investors who are using the Internet to find them and learn more about them. The latter occurs when they visit financial advisor websites and Google search their names. What they see determines who they contact for interviews.
Assuming you are an independent financial advisor, the following are the five characteristics on websites that describe many smaller RIAs:
- Boutique (less than $1 billion of AUM)
- Independent (owned by principals, not banks)
- Financial fiduciary
- Compensated with fees (fee-only or fee-based)
- Planning & Investment services
You can imagine the dilemma this creates for investors who are using the information on the Internet to learn more about financial advisors before they contact them or respond to them. They want to connect with the best (expertise, trust) financial advisors, but they all look alike or at a minimum are very similar.
At this point, a financial advisor might come to one of two conclusions. First, advisors know they have to have a website to at least be visible on the Internet. Second, they have to differentiate their firms so there is a higher probability that investors will contact them or respond to them when they initiate the contact.
While it might seem like financial advisors offer similar services and charge similar fees, there are still ways they can differentiate themselves from their competitors. Following are a few financial advisor marketing strategies that can be used to stand out in a very competitive marketplace.
Niche Specialization by Financial Advisors
Paladin’s research shows more than 60% of investors prefer financial advisors who specialize in working with clients like themselves. This makes the “Who We Serve” page on financial advisor websites extremely important.
Financial advisors who work with anyone who meets their minimum asset requirements are not specialists.
Advisors can focus on specific industries, client demographics, or investment strategies. By developing expertise in a particular niche, they can attract clients who are specifically looking for that kind of guidance.
Personalized Service by Financial Advisors
Many advisors claim they do not use a one-size-fits-all approach for their clients. However, models are how they maximize their net profit. So, there is a big difference between a marketing pitch about personalization and the potential reality.
The key is being able to prove this claim is true and not just a marketing pitch.
Providing clients with personalized attention and tailored financial plans can help differentiate a financial advisor. By taking the time to understand each client's unique financial goals and risk tolerance, advisors can offer customized solutions that cater to their specific needs.
Emphasize Technologies That are Used by Financial Advisors
Technology does not mean financial advisors are Robos or virtual. Technology does mean they are state-of-the-art and efficient. This can be particularly true for investment research and performance analytics.
Technology and the personal touch go hand-in-hand,
Financial advisors can stand out by leveraging cutting-edge technology to enhance the client experience. This might include offering user-friendly digital tools, providing real-time financial updates, or utilizing advanced analytics to optimize investment strategies.
Financial Advisors Should Focus on Financial Education
Financial advisors are not educating investors so they manage their own money. Quite the contrary. Financial advisors educate their clients so they have a better understanding of current economic and market conditions and how their assets are being invested in those conditions.
Knowledgeable investors make better clients.
Offering educational resources, such as webinars, workshops, or blog posts, can help clients make informed decisions about their finances. By positioning themselves as thought leaders in the industry, financial advisors can build credibility and trust with their current and future clients while differentiating themselves from competitors.
Financial Advisors Should Provide Transparent Pricing
Investors know financial advisors do not work for free. What they may not know is how they are compensated, how much they are compensated, or who compensates them. Withholding this information is a frequent practice that can imply financial advisors are hiding certain information from investors.
Advisors may or may not disclose how much they are paid, but they should disclose how they are paid.
Offering clear, transparent pricing can help in a competitive marketplace. By clearly communicating fees and other expenses, they can establish trust with their clients and show that they prioritize their client's financial interests.
Financial Advisors Should Practice Exceptional Communication
The last thing advisors should do is treat their clients like mushrooms. Keeping clients in the dark will come back to bite them in the next Bear Market, period of significant uncertainty, or prolonged underperformance.
In fact, financial advisors should be preparing investors for the next Bear Market during a current Bull Market.
Advisors who are proactive and responsive in their communication with clients can stand out in a crowded market. Regular check-ins and updates can help clients feel valued and supported. And, there is less emotion when they feel fully informed.
Financial Advisors Need a Strong Online Presence
Whether you are marketing to prospective clients or serving existing clients, digital marketing for financial advisors is critical. The Internet is where investors go to find what they are looking for. This could be financial advisors, information about advisors, or information about a financial topic.
We live in a digital world.
A strong online presence, including a professional website and active social media profiles, can help advisors differentiate themselves. By sharing valuable content and engaging with clients and prospects online, advisors can build credibility and trust.
Financial Advisors Benefit From Community Involvement
Assuming a high percentage of your clients are local, the greater your visibility in your local community the better. This alleviates any concerns investors may have about your commitment to the local area. This involvement becomes an important differentiating characteristic.
Your local involvement should target your ideal types of clients.
In fact, engaging in local community events, services, and initiatives can help financial advisors build relationships and establish themselves as trusted members and leaders in their communities.
Financial Advisors Should Affiliate With Other Local Professionals
Let’s say one of your marketing strategies is to target investors who are moving into your market area and are seeking local help. Or, you market your services to individuals who are recently widowed or divorced. What services do these individuals need that are not provided by you?
Financial advisors do not affiliate with other professionals who may compete with their economic interests.
The two most common types of professionals could be CPAs and attorneys (wills, trusts). Investors who are relocating could also need help with their real estate transactions. People who are recently divorced or widowed could need legal help or grief counseling.
Put yourself in the investor's shoes and go from there. Surround yourself with other experts who bring additional knowledge and services to the table.
