80% of financial advisors want to expand the size of their firms by adding new clients.
On the other hand, 20% are satisfied with their current client count and limit their growth opportunities to market appreciation, reinvested income, and new money from current clients. Many of these firms say they receive a few referrals throughout the year from satisfied clients.
There is a good chance these are relatively small firms and any commitment to marketing would come out of the pockets of the principals. They are not willing to take a short-term reduction in personal income to expand the size of their firms by adding new clients.
This article is written for the 80% that would clearly like to grow their firms by increasing their number of clients. New clients simultaneously increase revenue and the value of their firms.
High Quality Leads
Financial advisors do not need just any type of new leads. Advisors need steady flows of new leads that have the following characteristics:
- Meet their minimum asset requirements
- Need planning and investment advice
- Need ongoing services that produce recurring revenue
- Prefer to outsource work to professionals
- May have special requirements based on age, work status, net worths, goals, circumstances, risk tolerances, etc.
Working Backwards
Sometimes the best marketing solutions are developed by describing the goal and reviewing the optional strategies for achieving the goal.
We can start by clearly defining advisors’ need for new clients that fit the minimum requirements of their firms. They may even have a goal of a certain number of new clients/assets/revenues per year.
Before investors become clients, they must be qualified prospects for an advisor’s services. In this case:
- Prospects are investors that advisors have met with
- The meetings could be traditional or virtual
- They meet each other’s core requirements
- Mutual interest is established that requires future meetings
Prospects should not be confused with leads. Investors become leads when advisors receive their contact information. But, that is all they have at this stage. There has been no direct contact. Leads may or may not meet advisor requirements for becoming qualified prospects and eventually revenue-producing clients.
The number one challenge for 80% of financial advisors is the production of a steady flow of new leads that can be converted into prospects and clients.
So, what is the strategy for the production of new leads?
Three Solutions for Producing Leads
To be clear, there are more than three solutions for the production of leads, but these are the ones that are talked about the most.
Choice number one is to buy leads that are produced by third parties. This solution is used by professionals more than it is used by firms. That’s because these companies profile professionals as one of their services for the investors who use their services to find and research financial advisors.
Choice number two is to use advertising and public relations campaigns to produce leads. Search Engine Marketing (SEM) is the online version of these advertising campaigns. This form of marketing is dominated by brand-name firms with substantial marketing budgets.
Choice number three is to produce your own leads using three tactics:
- Outbound marketing is relatively obsolete (cold calling, direct mail)
- Networking for referrals
- Inbound marketing (SEO, SEM)
We will not spend time on outbound marketing or networking. Most advisors are already familiar with these marketing tactics. We will focus on inbound marketing because it is a relatively new strategy for many financial advisors.
Inbound Marketing
Inbound marketing, aka digital marketing, is the use of the Internet to create leads for your firm. There are four primary elements that make this possible.
First, inbound marketing means investors establish contact with financial advisors. This is infinitely superior to the invasive tactics that are associated with outbound marketing. For example, cold calling names that have no interest in the advisors’ services or products.
Second, investors have to be able to find financial advisor firms on the Internet to start the process. If investors enter advisor URLs in a search engine they already know the firms - at a minimum their names and URLs. Chances are they are using the Internet to learn more about advisors and their firms. So, to be successful, inbound marketing requires visibility on the Internet.
Third, what they see on the Internet has to be interesting enough that they visit advisor websites. Most of the time this occurs when they click on a link to an article or find advisors using social media.
Fourth, financial advisor websites have to be good enough that they can convert visitors into qualified leads for a firm’s advice and services. This is no simple task. All financial advisor websites disseminate information about the firm (Who We Are, What We Do, Who We Serve). Very few are designed to convince visitors to give up their anonymity and submit their contact information.
The Marketing Challenge
We have also found that many financial advisors struggle with the two primary conversion processes that impact their results.
The first challenge is converting leads, that are produced by inbound marketing, into viable prospects that are based on mutual interest. Advisors have to convince investors they meet their requirements and investors have to convince advisors they meet their requirements.
The second challenge is converting prospects into revenue-producing clients. This conversion rate should be 25% to 40% based on the sales skills of the professionals that market an advisor’s financial advice and services.
Some financial advisors struggle with this conversion process because they are more skilled at providing planning and investment advice. And, they cannot hire a marketing professional until they are generating more revenue, a real catch-22. In this case, what investors see on the Internet should do more of the selling for these advisors.
Timing
If digital marketing sounds like the right strategy for the production of high-quality leads, then the sooner financial advisors get started the better. That’s because digital marketing takes time to create online visibility that produces a steady flow of visitors to financial advisor websites.
For example, there is limited space on page one for keywords that drive the right types of investors to advisor websites. Step one is to get on page one for those keywords. Step two is to stay on page one.
This is possible regardless of the current size of an advisor’s firm. The key is to become a valuable resource for Google and the other major search engines. They will reward advisors with increased visibility when they are sources for high-quality content that Google can use to produce more traffic that is monetized with advertising.
