This Paladin Guide describes why so many financial advisors are dissatisfied with their marketing results and what they can do about it.
Paladin was established in 2003 to provide marketing services to hundreds of independent financial advisors who were RIAs, IARs, financial fiduciaries, fee-only, or fee-based. During our two decades of service, we can honestly say the frustration over organic growth rates has not changed for most financial advisors. They are still seeking answers that will accelerate the growth rates of their firms. 
What has changed is the rise of financial advisor digital marketing and its impact on the financial industry. How big is the impact? All of the lead generation companies use digital marketing to produce the leads they sell to financial advisors.
Why are so many financial advisors dissatisfied with their results? What has to change if financial advisors want to produce more organic growth for their firms and practices? And, most importantly, how can the Internet and digital marketing help make this happen sooner than later?
The ten frequent marketing questions are:
Has outbound marketing become obsolete in the digital age?
Outbound marketing is a strategy that stockbrokers, planners, and financial advisors have used for decades to initiate contact with individual investors. It included invasive marketing practices like cold calling and direct mail, and it worked for decades because everyone had access to telephones and mail with very few alternatives.
Paladin Insights: Outbound marketing was considered invasive because financial advisors contacted people who did not want to be contacted.
Beyond its invasive nature (i.e., cold calling during the dinner hour), there were deeper reasons for its rapid decline. Fewer and fewer advisors were willing to make cold calls due to the extremely high rejection rates - approaching 100%. Some major firms have already outlawed cold calling because it is associated with high-pressure sales tactics (for example, boiler-rooms).
Technological advancements have also enabled investors to filter and block unwanted sales contacts, further diminishing the productivity of outbound marketing tactics. For example, the widespread adoption of caller ID, spam filters, and ad-blockers have created significant barriers for traditional outbound marketing strategies, making reaching investors at work and home even more difficult.
Paladin Insights: Outbound marketing worked when investors did not have a convenient way to find and screen financial advisors on their own. What if the Internet has replaced the telephone as the primary way financial advisors initiate contact with potential clients? The Internet gives investors more control over initial contacts.
And there is another important consideration. In the past, financial professionals were responsible for producing their own leads and clients. Outbound marketing was their primary strategy for making this happen: Cold calling, direct mail, networking with COIs, referral-based marketing, etc. In the digital world, firms have to take more responsibility for producing leads for their sales professionals due to the importance of websites in the sales funnel process.
To make this happen, financial advisors must adopt a more investor-centric approach to thrive in the current digital marketing landscape, leveraging alternative strategies that emphasize personalization, targeted messaging, and generating interactive engagements.
Paladin Insights: In the past, outbound marketing was practiced by professionals who were responsible for producing their own leads.
Will inbound marketing replace outbound marketing?
Welcome to the digital age!
Inbound marketing is an investor-centric marketing approach that aims to attract and engage potential clients by providing valuable content and experiences. Think about the moth to a flame. Instead of interrupting people with traditional outbound methods, inbound marketing focuses on creating and sharing relevant and helpful content that aligns with the interests and needs of the target audience. The goal is to build trust, establish credibility, and ultimately generate contacts, leads, and new clients.
Inbound marketing is the future because it taps into the changing behavior of investors. And, with the rise of the Internet, investors have become more adept at ignoring or avoiding traditional marketing tactics and conducting their own online searches for financial advisors and information.
Paladin Insights: Does inbound marketing work? That is how you found Paladin.
Financial advisors can position themselves as industry experts and thought leaders by offering valuable content, such as blog posts, guides, webinars, videos, e-books, and podcasts. This approach creates a strong, personalized connection with potential clients and increases the likelihood of conversions and long-term relationships.
Financial advisors can make Inbound Marketing work for them by following two key strategies:
A. They must identify their target audiences and understand their pain points, challenges, and aspirations. This knowledge allows them to create content that addresses these needs and positions the firm as a valuable resource of information and solutions.
B. Advisors must optimize their content for search engines to increase their visibility. This includes incorporating relevant keywords, using on-page SEO, and ensuring their website is properly structured for Search Engine Optimization (SEO).
Paladin Insights: You have seen how the Internet has impacted the marketing practices of other industries. It is reasonable to assume it will have the same impact on the financial service industry. Inbound Marketing works because it focuses on providing valuable content and experiences to attract and engage potential clients. Advisors can implement inbound marketing by understanding their audiences, creating relevant content, and optimizing it for search engines.
About Financial Advisor Websites
While having a website is not an absolute requirement for inbound marketing, it greatly enhances its effectiveness. Think of your website as your 24x7 online greeter. Your website serves as a central hub where investors can find and engage with the content created by your firm. It also allows for easily disseminating valuable information about your firm and provides an online platform for capturing leads and nurturing relationships.
While having a user-friendly website that investors can easily navigate and engage with is important, your financial advisor website should also be fully optimized for search engines (SEE; Search Engine Experience). Optimizing your website’s technical aspects, including page loading speed, mobile responsiveness, and secure connections (HTTPS), is essential for search engine ranking.
When creating the content for your financial advisor website, be sure to conduct thorough keyword research. You want to include important keywords that your ideal clients may use in a search engine to find the types of services that your firm provides. Naturally incorporating these types of keywords into website content, including headings, titles, and meta descriptions, helps search engines understand the website's relevance to specific types of search queries.
Content originality and quality are also vital for SEO and SEE. Creating high-quality content that aligns with the needs and interests of the target audience increases the likelihood of being ranked higher in search engine results. This includes using multimedia elements like images, videos, and infographics to enhance the user experience. Building backlinks from reputable websites and improving overall website authority through social media mentions, guest blogging, and influencer collaborations are also effective SEO strategies.
Why are so many financial advisors skeptical about digital marketing?
Ask yourself this question: When did your financial advisor website last generate a qualified lead for your firm? If your answer is “never” or “several months ago” you know why financial advisors are skeptical.
We believe this skepticism towards digital marketing largely stems from their lack of past success. While every financial advisor in America has a website, many have yet to evolve into using their websites as an actual marketing tool. In most cases, websites are more like online brochures that distribute information, versus an effective marketing tool that connects and engages with visitors.
This may be the source of their doubts about the potential benefits of digital marketing - they are not doing it the right way. Many smaller independent RIAs and IARs believe only bigger firms can afford to do inbound marketing the right way.
Paladin Insights: Have you ever wondered why some firms are so much bigger than other firms? Could it be the differences in the development and execution of their marketing strategies?
Another basis for this skepticism is the complexity and novelty of effective digital marketing strategies. Unlike traditional marketing methods, digital marketing requires a comprehensive understanding of various platforms and algorithms to enhance online visibility and produce website traffic. This is a minimum requirement for a successful digital marketing experience.
Another significant reason can be the perceived low conversion rates that may occur on websites. Oftentimes, advisors find their website traffic does not convert into valuable leads. As we have already noted, there is a good chance that the financial advisors are not giving investors good reasons to initiate contact.
The average website conversion rate for the financial service industry is in the 1% to 2% range. Let’s use 2% just to be generous. If a website produces 100 unique visitors per month it should produce 2 leads. However, if it produces 500 visitors it should produce 10 leads.
Social media platforms can also be powerful tools for building brand awareness, promoting content, and generating leads. Advisors should establish a strong presence on platforms such as LinkedIn, Twitter, and Facebook, where they can engage with their target audiences, share their expertise, and drive additional traffic to their websites.
Financial advisors should embrace digital marketing as an indispensable strategy to attract and engage potential clients. Advisors can communicate their expertise and build relationships by understanding their audiences, creating invaluable content, optimizing it for search engines, and utilizing social media.
When done correctly, digital marketing has immense potential for financial advisors. That’s because investors are using the Internet to find them.
Why is online visibility the key to success for inbound marketing?
Paladin Insights: Websites do not produce their own traffic. Internet visibility produces website traffic. Consequently, the amount of website traffic determines the number of actual leads.
The sales funnel process starts on the Internet, where investors go to find, screen, and initiate contact with financial advisors.
Every financial advisor has a website, but 82% tell Paladin their websites are not consistent sources of new leads. The issue may or may not be the website. The real issue may be a lack of traffic to the website, which can mean the real problem is a lack of online visibility.
Search engine optimization (SEO), which produces online visibility, is an essential aspect of digital marketing. It involves optimizing various elements of financial advisor websites, such as content, keywords, meta tags, and backlinks, to ensure search engines understand your website's relevance for specific search queries.
SEO takes time because search engines have complex algorithms that analyze numerous factors before determining the rankings of various search engine results. It requires a consistent effort to build a strong online presence and improve your website's visibility in Search Engine Results Pages (SERPs).
As your website gains recognition and climbs higher in the search engine rankings, it becomes more and more visible to investors. Increased visibility translates into higher organic traffic, as investors are more likely to click on websites listed at the top of the SERPs. However, achieving and maintaining a top position in search results is a continuous process. Competition is fierce, and other websites are vying for the same visibility.
Driving traffic to your website is only the first step. Converting that traffic into leads, prospects, and revenue-producing clients is equally crucial. The conversion rate, typically around 2% with some variation, measures the percentage of website visitors who take a desired action, such as submitting their contact information. Optimizing conversion rates involves refining your website's design, user experience, persuasive copywriting, and free offers.
All these processes—SEO, increasing visibility, and improving conversion rates—take time, patience, and ongoing efforts. Digital marketing requires constant monitoring, analysis, and adjustments to stay ahead of the competition and adapt to changing market trends. Building a successful online presence is a journey, but with consistent efforts and the right strategies, you can effectively increase your website's visibility, drive quality traffic to your website, and convert more visitors into valuable leads who become revenue-producing clients.
Why is competition between financial advisors becoming more fierce?
The popularity of the Internet for finding information and service providers has significantly reshaped the financial advisory landscape, impacting how financial advisors market their advice and services.
Investors will typically visit multiple websites before they contact the ones they want to talk to. Therefore, a productive website has to be competitive with other websites.
With as many online options as investors are willing to research, financial advisors face intense competition against each other and robo-advisors and other digital platforms that offer similar services. This expanded pool of alternatives has altered investors' behavior, forcing advisors to become more innovative and strategic in their marketing efforts.
One major impact is the necessity for advisors to develop a robust online presence. Investors increasingly turn to the web to find advisors, learn more about them, and initiate contact to schedule introductory interviews.
This investor-driven process necessitates a well-designed website, engaging social media activity, local visibility, and regular content publication for advisors to stand out online. SEO is necessary for increasing financial advisors’ visibility on the Internet.
The Internet has also raised the bar for transparency and speed. Investors expect immediate access to information, real-time updates, and clear transparency for fee schedules and other information. Advisors must address these expectations in their marketing efforts, highlighting their transparency, responsiveness, and value propositions.
At its core, personalized, high-quality content marketing has become essential. In the digital era, content is king, and investors will likely gravitate toward advisors who provide valuable information and insights. This calls for financial advisors to focus on informational blog articles, white papers, webinars, videos, and other types of personalized information to display their expertise and build trust with potential clients.
Paladin Insights: Building credibility and trust on the Internet is a critical first step in your digital marketing activities.
The rapidly expanding online world has created an opportunity for highly targeted marketing. It is no longer a one size fits all environment. With access to vast amounts of investor data, advisors can develop strategies to reach specific audiences based on demographics, financial goals, and investor behavior. Utilizing data-driven marketing techniques can allow advisors to reach the right people, at the right time, with the right message, turning the challenge of digital marketing into a major business opportunity.
What happens when financial advisors try to wear too many hats?
Financial advisors often juggle multiple roles, which can be overwhelming, particularly in the early stages of establishing their firms. Beyond their core competency of providing advice on financial matters, they also don the hats of a marketer, salesperson, Chief Investment Officer, analyst, customer service representative, compliance officer, operations manager, and even a Chief Technology Officer.
While multi-tasking can be beneficial in controlling operating costs, it can also divert their focus from their primary roles, which are advising current clients on financial matters and adding new clients. They might find themselves buried in tasks that are not necessarily within their area of expertise, leading to inefficiencies and potential business stagnation.
The role of marketing is crucial in a financial advisor’s business, which often requires building credibility, trust, and personal relationships. However, not all financial advisors are naturally adept at marketing. A financial advisor's skills generally focus on understanding and analyzing complex planning scenarios and providing expert investment advice that is based on in-depth analysis. These skills don't necessarily translate into successful marketing skills.
Advisors may also struggle with creating a unique brand identity, devising an effective marketing strategy, managing social media platforms, or optimizing their online presence for search engines. This might result in less-than-optimal new client outreach and growth.
From a time management perspective, financial advisors spending significant portions of their day on non-advisory tasks may also jeopardize the highest and best use of their time equation. The time spent on creating marketing plans, managing social media, or addressing IT issues could have been invested in deepening their financial knowledge, honing their advisory skills, or interacting more closely with their clients.
It's not to say these alternative tasks aren't important, but rather to highlight that they may be better off delegated to professionals who specialize in these areas, freeing up the advisors’ time to focus on their core competencies.
Additionally, financial advisors should have several other concerns. For example, maintaining strict regulatory compliance is paramount in this line of work. Mistakes or oversights can lead to severe penalties, both financial and reputational. Furthermore, advisors must stay updated with the global financial markets that are changing on a daily basis.
Lastly, while wearing multiple hats might give an illusion of control, advisors should acknowledge their limitations and prioritize building a supportive team, inside and outside their firms, to manage their multifaceted business more effectively.
Why do so many smaller RIAs lack realistic marketing budgets?
In many smaller financial advisory firms, budgeting for marketing is often overlooked or outright dismissed. This oversight is often due to the incorrect perception that marketing represents an unnecessary expense, which may impact owner incomes.
Paladin Insights: Spending money on marketing may not generate short-term results.
This is a short-term perspective that can limit the growth of the business because it fails to address the long-term benefits of adding new clients through digital marketing initiatives.
Without a marketing budget, firms mainly rely on word-of-mouth referrals and hope for spontaneous opportunities, often called "bluebirds.” However, referrals alone are rarely sufficient to sustain growth. Most firms have some annual attrition, and there are not enough referrals to offset clients who die, relocate, or terminate advisors. Such an unplanned approach is inconsistent and unpredictable, making it an unreliable strategy for business growth.
Paladin Insights: Financial advisors can buy immediate page one visibility when they invest in paid advertising campaigns.
Moreover, lacking a marketing budget implies a lack of a comprehensive marketing strategy. This results in haphazard attempts at attracting clients that may not yield desired outcomes. A planned marketing budget, on the other hand, forces firms to strategize their new client acquisitions, leading to a more focused and effective marketing strategy.
Contrary to the belief that marketing expenses eat into profits, a well-planned marketing strategy is actually an investment that can generate significant returns in the long run. By increasing a financial firm’s client base, firms can not only increase their revenue but also increase their future value.
Paladin Insights: One perception is how marketable is the financial advisor. The answer could be “not very,” which makes marketing results more difficult to produce.
Implementing a dedicated marketing budget is indispensable for even small financial advisory firms that want to achieve some level of organic growth. While it may seem like an added expense initially, the potential return on this investment makes it a key contributor to a firm’s long-term success.
Is asset appreciation a realistic growth strategy?
Relying on market appreciation and reinvested income to grow a firm's Assets Under Management (AUM) may be a risky, long-term strategy because it depends on the volatile performance of the financial markets
Paladin Insights: Marketing is a way to produce organic growth for financial advisors. Advisors cannot say market appreciation from current clients, which goes up and down on its own, is a way to produce organic growth. However, it is a way to grow AUM during periods of rising markets.
Despite historical trends showing long-term market growth, stock market volatility is normal, leading to periods of increasing and decreasing stock prices. Furthermore, this strategy ties a firm's growth directly to market conditions over which the firm has little or no control.
In down markets, this strategy can significantly hinder a firm's growth. Bear markets, characterized by falling prices and widespread pessimism, can negatively impact a firm's AUM. Even if a financial advisor's decision-making is sound, external factors can lead to shrinking AUM, negatively impacting a firm's overall growth.
Paladin Insights: Declining stock prices produce the best marketing environment for advisor services - more investors are seeking replacement advisors. More DIYs want professional help.
Moreover, due to the compound nature of investment returns, a firm relying on market appreciation must outperform in up markets to compensate for down markets. That’s because it can often take two or more good years to offset the impact of one bad year.
In this case, the market performance math can work against you - If you start with a dollar and it declines to fifty cents, you have a 50% decline. However, because you have a reduced asset base (fifty cents), you need a 100% return to return to the dollar valuation. And this does not account for the impact of inflation and expenses, which means the return has to exceed 100% to achieve a zero net return. This makes recovery and revenue growth a steep uphill battle.
Hence, a more effective long-term growth strategy would include diversifying revenue sources, such as providing value-added services, focusing on new client acquisition and retention, and developing robust planning, investment, and risk management strategies. These efforts can help sustain a firm's growth regardless of market conditions and provide a buffer during down markets.
Paladin Insights: Financial advisors should be adding more clients in down markets.
Financial advisors warn clients not to run for the hills during down markets. They should follow their own advice. Down markets represent their best opportunities for adding new clients.
Why doesn’t marketing guarantee its results?
The elephant in the room that causes many financial advisors to fail at establishing a marketing plan or budget stems from the inherent uncertainty of marketing results. A marketing campaign, by its very nature, cannot guarantee results. It can demand an investment of time, money, and resources, with the potential for unpredictable returns. This is a bitter pill to swallow for those in the finance sector, where ROI is the primary measure of success and an important guiding principle.
In addition, many financial advisors do not possess superior sales skills. While they may excel in the technical aspects of their field (planning, investing, tax, risk management), their skills may not extend to persuasive communications or the art of selling. This lack of superior sales skills may end up producing inferior sales results, which can further deepen a financial advisor’s reluctance to invest in digital marketing campaigns.
However, financial advisors must consider their need for marketing despite these obvious challenges. In an increasingly competitive business landscape, It is vital for advisors to differentiate themselves and communicate their unique value propositions to potential clients. This can only be achieved through effective marketing.
Paladin Insights: There are no guarantees for marketing results, but you can be sure there will be no significant organic growth if a marketing strategy is not in place.
Advisors may want to reconcile the uncertainty of marketing ROI by treating it like any other investment. Just as a diversified portfolio is a buffer against the volatility of individual securities, a multi-faceted marketing plan can mitigate the risk of individual strategies not yielding positive results. Incremental investment in different marketing approaches, followed by analytics and thoughtful measurement, can lead to a viable strategy over time.
Paladin Insights: It is essential for financial advisors to understand the true value of marketing and to change their perception of it from a cost to an investment. Like any investment, it carries risks and may not yield immediate returns, but its long-term potential to enhance business growth and sustainability is undeniable. This mindset shift is the key to reconciling the uncertain ROI of their marketing efforts.
Should financial advisors bet on the Internet?
Investing in web-based marketing strategies has proven to be an effective way for financial advisors to accelerate the growth of their firms.
Several industries have shifted their marketing to the digital world, making the Internet a major source for a financial advisor’s business growth. However, the dynamic nature of digital marketing necessitates expert knowledge to optimize its results.
Paladin Insights: Marketing financial advice and services online is a perfect digital application because it is based on the exchange of information.
An undeniable strength of digital marketing lies in its reach. Unlike traditional media, the Internet is not confined by historical constraints. It permits financial advisors to showcase their services to an unlimited audience around the clock.
However, with such a broad audience, segmenting and targeting specific market demographics is crucial. By engaging professionals experienced in digital marketing, financial advisors can ensure their message reaches their ideal clientele.
In addition, the interactive nature of digital marketing permits real-time engagement with potential clients. Platforms such as social media, email marketing, and live chat options on websites provide multiple ways financial advisors can build relationships, answer queries, and present personalized services. Digital marketing professionals can assist in optimizing these channels to deliver an effective and user-friendly experience.
Plus, the data-tracking capabilities inherent in digital marketing make it a gold mine for gathering investor insights. Professionals can analyze the data to understand customer behavior, preferences, and trends. This knowledge enables financial advisors to refine their marketing strategies and create highly targeted, personalized services that resonate with their types of clients.
While the digital world provides enormous potential, navigating its complexities can be challenging for financial advisors. By engaging with digital marketing professionals, advisors can harness the internet's power more effectively, ensuring their services reach the right people at the right time with the right messaging. With the internet's ubiquity and accessibility, and with professional guidance, this marketing approach is indeed a safe and profitable bet.
We hope you found this information helpful. Contact Paladin to schedule an introductory call if you want to learn more about ways your firm can grow in the digital age.
