Advisers Should Think Like Marketers

Advisers can set themselves apart by developing an effective value proposition for prospective clients and referrals.

To grow their businesses, advisers should identify a target group of clients, create a value statement and generally think like classic marketers, according to research from Cerulli Associates.

These findings, published in the 2Q 2016 issue of The Cerulli Edge – Advisor Edition, examine business development and the value of strategic alliances and adviser events.

“Advisers need to identify their ideal target market and define a value proposition that is compelling to that audience—the same as any business venture in any industry,” says Kenton Shirk, associate director at Cerulli. “For example, an adviser with a defined value proposition might specialize in working with corporate executives who are concerned about planning needs such as managing concentrated stock exposure, minimizing taxes, protecting assets, and maximizing tax-deferred savings in retirement plans.”

Advisers can stand out from the competition by creating a strategy that includes articulating their firm’s story; defining their value proposition; asking for input from clients on the types of events they have enjoyed and activities they would like to attend; and creating strategic relationships cultivated over time. Defining their practice’s value proposition often makes advisers feel more confident when communicating their message, which creates more enthusiasm in their conversations with prospects, according to Cerulli’s findings. 

“An investor considering a new relationship with a financial adviser wants to understand the value that a potential adviser can offer before committing to a long-term professional relationship,” Shirk explains. “Given the difficulties many investors face when evaluating potential adviser relationships, they frequently seek recommendations from trusted family members, friends and professional providers who can vouch for an adviser’s trustworthiness, expertise and ultimate value. Advisers need to articulate a compelling value proposition to not only prospective clients, but also to their referral sources.”

According to advisers, 67% of their new clients are referrals from clients, friends or family members. Another 18% are referrals from other professionals, such as certified public accountants and attorneys.

NEXT: Success with niche marketing

Advisers find the most success with niche marketing because it forces them to be specific about their target market and value proposition, according to Cerulli. The adviser's message becomes tailored to their audience's needs, which makes it more powerful. 

Two-thirds (68%) of advisers have used niche marketing strategies, Cerulli says. Of those, 37% indicate that the approach is very effective, ranking highest among all options. An additional 59% consider niche marketing to be at least somewhat effective. Comparatively, roughly 61% of advisers have used social media marketing techniques, but only 5% consider their efforts to be very effective.

Advisers often fear that niche marketing will alienate prospects who fall outside of this tailored audience, but in reality, a more targeted value proposition helps advisers focus on marketing efforts with targeted tactics and messaging, Cerulli says.