Being More Methodical About Marketing

Advisers need to balance the many demands on their time that come from running and expanding a practice. 

There is a wide gap in marketing and client acquisition behavior among advisers, Broadridge Financial Solutions learned in a survey of more than 400 financial advisers.

Only 21% are what Broadridge terms “growth-focused advisers,” which it defines as those between the ages of 25 and 49 who spend more than $5,000 a year on marketing and who say they are “aggressively focused on adding new clients.” Those advisers were more likely to have higher assets under management, to spend more on marketing per acquisition, to gauge their marketing effectiveness in terms of revenue and to be confident in their ability to meet their business goals.

“There is a similar gap in marketing sophistication in most practice-driven industries, like law firms and medical practices,” Kevin Darlington, vice president of adviser solutions at Broadridge, tells PLANADVISER. “Those who are adept at giving investment advice are often not equipped for running effective marketing campaigns. Unfortunately, those who are not inclined to address this need will probably see their long-term success suffer.”

Darlington acknowledges that advisers face “many competing priorities. Forty percent said finding enough time to meet all of their goals is their top challenge.” So to break out of the “vicious cycle” of not having enough time and not growing their business, Broadridge recommends that they set aside time to market their practice and “find the correlation as to what is moving the needle.” In fact, Broadridge helps advisers analyze their marketing efforts, which is why, Darlington says, he is “biased toward the marketing channels that are measurable.”

The survey also found that, on average, advisers spend 3.3% of their revenue on marketing, which Darlington says is probably the right amount. The key, though, is making sure that those dollars are being spent effectively, he says.

“We are trying to help advisers see across all of their digital channels—websites, social media and digital advertising,” he says. Certainly, Darlington adds, referrals will continue to be important for advisers, but, he says, they need to be paired with active marketing efforts. The survey found that marketing takes 3.7 months to convert a prospect to become a client, while referrals take 1.8 months. The best way for an adviser to begin to think about their marketing efforts, Broadridge says, is to be specific about what their growth, business and marketing goals are—with a clear line of sight into who their ideal target customer is.

The survey also found that advisers’ most popular channel for marketing is websites (76%), followed by in-person events (57%), social media (45%) and customer relationship management (CRM) systems (44%). Moving forward, 19% plan to increase their investments in social media, followed by webinars (14%) and digital media advertising (13%).

Twelve percent plan to hire in-house marketing staff. Among those with more than $200 million in assets under management, 20% plan to do so.

“We’re seeing a planned strategic investment in digital marketing among aggressive, growth-oriented advisers and firms,” Darlington says. “Advisers are already investing in and seeing success in organic social media marketing. As it becomes increasingly difficult to break through the organic clutter, the natural next step is increased investment in paid digital advertising channels that can offer powerful targeting to new audiences and stoke the lead generation pipeline. The most growth-minded advisers are separating themselves from the pack in terms of new client acquisition rates.”

While the economy and the markets have been strong for a long period of time, should they become more volatile, plan sponsors and individuals will be more inclined to change their advisers, Darlington notes. “Those with a better marketing and customer acquisition framework will separate themselves even further from those who do not,” he says.