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:
Financial advisors and professionals have three primary strategies they can use to generate leads for their firms and practices:
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.
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.
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.
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:
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.
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:
JBW’s Current Marketing Process:
How Paladin Helped:
JBW’s new client results have tripled in the past 18 months.
Contact Paladin to schedule an introductory call.