From Clicks to Clients: A Financial Advisor Guide to Digital Marketing
The Internet is just beginning to significantly impact how financial advisors market their advice and services to individual investors and their families.
For clarity’s sake, a financial advisor could be a firm or a professional. In many cases, the professional is the firm. This is a critical distinction when Paladin asks potential clients: “Who is responsible for producing leads at your firm? Is it the firm's responsibility or the professionals who work for the firm?”
We have found that when firms say it is their professionals’ responsibility to produce leads, there is no reason for the firms to develop a productive marketing strategy. As stated, it is not their responsibility. They can hire more financial professionals to generate leads if they want more leads.
Our next question can be even more revealing: “Is your current marketing strategy producing an adequate flow of new leads each month?” 82% of the advisors we talk to say they are unsatisfied with their current lead flow but may not do anything about it because it is not their responsibility.
In numerous conversations, they said referrals were the primary source of new leads that produced organic growth. There is no question that these are the best type of leads, but a rare firm said there were enough referrals to achieve their goals. In fact, in most cases, referrals barely offset their client attrition.
Consequently, their main sources of asset growth were asset appreciation and reinvested income during Bull Markets.
Our goal in this article is to clarify this strategic marketing topic and describe a new alternative that is just getting started for financial advisor firms. Our five topics include:
- Three ways to generate investor leads
- Outbound marketing by financial advisors is obsolete
- The rise of inbound marketing for financial advisors
- How the Internet changed the game for financial advisors
- The digital marketing solution for financial advisors
Read our popular Quick Guide, "Virtual Marketing in the 2020s."
Three Ways to Generate Investor Leads
Financial advisors and professionals have three primary strategies they can use to generate leads for their firms and practices:
- First is the traditional Outbound Marketing tactics that the financial service industry has used for decades: Cold calling, direct mail, networking, and seminars. Some of these tactics can be used by firms (advertising), and most of the tactics are used by professionals (cold calling).
- The second is to buy leads from third parties. In general, the third parties use paid advertising campaigns on the Internet, then sell the leads to multiple advisors - usually three or more. Many financial firms and professionals complain about the quality of their leads.
- The third is for firms to use digital marketing to produce leads. They may use SEO (Search Engine Optimization) to build visibility and produce traffic to websites that are designed to convert visitors into leads.
Other forms of marketing (advertising, public relations, radio, TV) may be used by larger firms with substantial marketing budgets. The top three that we hear about are described above.
Outbound Marketing by Financial Advisors is Obsolete!
One of the three popular strategies that financial professionals use is Outbound Marketing. Financial professionals have used these marketing strategies since the 1960s to initiate contact with individual investors.
Their primary form of outbound marketing was cold calling because everyone they wanted to reach had a telephone. All the financial professionals needed was their telephone, a headset, a list of investors, some aggressive sales skills, and a high tolerance for rejection.
Rejection rates approached 100% in particular since the advent of Caller ID, spam filters, and other screening tools that helped consumers avoid unwanted solicitations. Today, even some wirehouses have restricted the use of cold calling due to its invasive nature and its reputation for unsavory sales tactics by boiler rooms.
I can’t remember the last time I talked to a financial firm or professional who relied on cold calling to generate leads.
Watch: Five Signals Your Financial Advisor Website Isn't Converting Traffic
The Rise of Inbound Marketing for Financial Advisors
One of the main reasons for the decline of outbound marketing was the rise of the Internet and the power it gave investors over the process.
Just like the telephone made cold calling possible, the Internet has had a similar impact, except in the opposite direction. Instead of giving advisors more power over the process, it has provided that power to investors.
Just like everyone with money had access to the telephone, now they have access to the Internet. And, as noted, they can use spam filters to block unwanted solicitations.
So, what is the power?
The Internet provides a fast, easy way for investors to find, screen, and contact the financial advisors they want to interview. And they can maintain their anonymity while they conduct their searches and due diligence. This was quite a transition from the “cold-calling cowboy” days of the past.
Now, it’s up to financial advisors to figure out how they harness the power of the Internet and make it work for them.
This is the role of a full-service digital marketing agency like Paladin.
How the Internet Changed the Game for Financial Advisors
The Internet has created Inbound Marketing opportunities for financial advisors who own their brands and websites.
By definition, Inbound Marketing is based on investors using the Internet to find, research, and contact financial advisors - just the opposite of Outbound Marketing, which requires advisors to initiate contact with investors.
This is where digital marketing enters the picture.
Three primary metrics drive the success of digital marketing strategies:
- Are advisors easy to find on the Internet?
- What do investors see when they visit financial advisor websites?
- Are financial advisor websites designed to convert visitors into leads?
These key metrics measure the success of a digital marketing strategy. The right answers to the three questions can mean the Internet will be an advisor’s primary source of new leads for their firms.
Today, the marketing of financial advice has gone from an aggressive advisor and a telephone to digital marketing based on how investors use the Internet to find, screen, and contact financial advisors.
The bottom line: Marketing financial advice, services, and products has gone from invasive to unobtrusive if you know how to make the Internet work for you.
A Digital Marketing Case Study for Financial Advisors
JBW Wealth Management is a fictitious firm, but the circumstances are real. We protect the proprietary nature of the information we access when we provide financial advisors with our FCMO (Fractional Chief Marketing Officer) services.
The facts about JBW:
- A 15-year-old independent RIA located in Florida
- AUM is $185 million
- 3 owners provide retirement planning and investment services
- One is part-time and close to full retirement
- No experienced in-house marketing professional
- The target market has been retirees, including late-stage
- One owner follows up with infrequent leads
- 3 support staff (one part-time; one bi-lingual)
- Minimum asset requirement: $500,000
- Will provide retirement plans for a fixed fee
JBW’s Current Marketing Process:
- The principals have a limited vision for the growth of their firm
- They have no intention of selling the firm for at least ten years
- They want to reach $500 million of AUM during their remaining time
- Their current website is three years old and has never produced a lead
- They are virtually invisible on the Internet
- Lack of visibility includes their local market
- Their main source of leads is referrals (3-4 per year)
- They convert one to two referrals into revenue-producing clients
- They lose three or four clients due to relocation, death, and memory care
- The main source of growth is market appreciation and reinvested income
How Paladin Helped:
- A new strategy that targets pre-retirees and early-stage retirees
- Design and develop a new custom lead generation website
- Add a page that describes the firm’s custodian (brand name)
- Emphasize safety, privacy, and continuity on the new website
- Start using video to communicate culture and philosophy
- Add free offers to the new website (eBooks, checklists, webinars)
- Develop a multi-generational approach targeting younger investors
- Add affiliated professionals who work with seniors
- Provide SEO services that build visibility and traffic
- Add a quarterly advertising campaign for competitive keywords
- Emphasize local visibility in future marketing campaigns
JBW’s new client results have tripled in the past 18 months.
Contact Paladin to schedule an introductory call.