Every advisor in America would make more money if they had more qualified leads to talk to each month. But, based on the strategies that financial advisors use, generating more leads can be expensive, time-consuming, and frustrating. And, ROI can be non-existent when the rejection rates approach 100%.
Can this be the reason why so many advisors struggle with the production of leads? Or, are there other considerations?
Can there be a cost-effective, positive ROI solution for financial advisors who struggle with the generation of qualified leads?
Ready to discuss your marketing needs with a professional firm that specializes in the financial services industry? Contact Paladin Digital Marketing to see how we can help.
Knowledge-Based Business
For decades financial services has been a sales-based business. Stockbrokers sold securities and mutual funds for commissions. Eventually a powerful sales culture dominated the financial advice business. The best advisors were big producers who generated the most commissions for their firms.
In more recent times, this model has changed for about 40% of the industry that currently charges fees for their knowledge, advice, and services. These advisors are paid for what they know versus how much product they can sell.
A lot of these professionals are relatively poor salespeople. That makes sense because their clients don’t pay them commissions for product sales. They pay fees for sage planning and investment advice. Consequently, the best professionals are great planners and investment advisors. In fact, many of them do not even like sales, which limits their ability to generate leads and convert them into revenue-producing clients.
The Appreciation Machine
A high percentage of financial advisors have achieved a critical mass of assets that produces significant incomes for them. Plus, these assets under management have three sources of growth without adding any new clients: Market appreciation, reinvested income, and new money from current clients.
It is a pretty comfortable situation when advisors can sit back and watch their current clients’ assets increase in value. Asset-based fees keep going up and no selling is required for this passive type of growth.
Outbound Marketing is Obsolete
The foundation of Outbound Marketing is financial advisors initiating contact with investors. The two most frequent forms of Outbound Marketing have been cold calling and direct mail.
Most pundits would agree Outbound Marketing is expensive, time-consuming, and the ROI is just not there. At this point, only aggressive salespeople are using Outbound Marketing tactics to initiate contact with investors.
The Achilles heel for this type of sales is trying to reach investors who do not want to be reached. This produces sky-high rejection rates and it is about to get worse due to the rising use of Caller ID and spam filters.
It is no wonder why higher quality advisors no longer waste time or money on sales activities that produce such poor results.
Inbound Marketing – Why the Skepticism?
Even though financial advisors are prolific users of the Internet when they are seeking services, products, and providers, they continue to question the value of Inbound Marketing.
The foundation of Inbound Marketing is investors’ willingness to initiate contact with financial advisors. This may be the crux of why some advisors continue to question the value of Inbound Marketing. When was the last time an investor initiated contact with a financial advisor? The answer may be never or so few times the leads had no impact on the advisors’ business.
Even though the Internet has had a profound impact on the marketing tactics of other industries it has to compete with the 650,000 professionals who sell financial products.
But, make no mistake, the impact of the Internet is coming for one simple reason. If gives investors more control over the information they rely on when they select financial advisors. They can visit advisor websites. They can Google search names. They can visit regulatory agencies.
Ignore this trend at your own peril.
The Lead Generation Companies
There is another indicator that digital marketing is a great way to generate leads for financial advisors.
Lead generation companies that produce thousands of leads per month and sell them to financial advisors rely on Inbound Marketing to produce the leads.
The prominent lead generation companies do not use cold calling or direct mail tactics to initiate contact with investors. Instead, the higher quality lead generation firms rely on Inbound Marketing tactics that produce warm prospects for financial advisors.
If they can use the Internet to produce leads it stands to reason financial advisors can use similar tactics and produce the same or better results.
High Quality Leads
There is another reason why financial advisors should use Inbound Marketing to produce leads for their firms. Their websites will produce the highest quality leads they have ever experienced.
Think about the process investors go through before they initiate contact. They have to learn more about you before they chose to make contact. They must like what they see or they would not initiate contact.
Can we say they are pre-sold? Not quite, some selling will still be required. But, selling is much easier when investors have positive pre-dispositions.
It Is About Control
Inbound Marketing works because investors want more control over their advisor selection processes.
They can search the web and maintain their anonymity. They initiate contact with the advisors that interest them. They are not fending off salespeople who are trying to sell products.
They do not want advisors to be their sole source of information. They recognize a lot of the information they receive is contained in sales pitches.
You have to offer something of value to convince them to initiate contact. That might be an interview because they are actively seeking advisors. Or, it might be a free eBook that addresses a financial pain point.
The Solution
The solution is simple if you are part of a firm that owns its brand and website. You can use Inbound Marketing to produce warm leads that are easier to sell to.
If you are a professional, you can use the services of a lead generation company to produces the leads for you.
Either way, you have solved your lead generation problem. Now it is up to you to convert leads into clients.
