According to the SEI Advisor Network Quick Poll, “How Are You Restoring Firm’s Revenue,” only 14.9% of the 200 respondents cited expense reduction as their primary strategy for restoring revenue, and only 1% said they are reducing staff.
Instead, advisers are focused on building business through client acquisition efforts, primarily driven by referrals, and developing new alliances with centers of influence, according to SEI. More than half of the poll respondents (51.6%) ranked new client acquisition as their number one strategy for restoring revenues. Additionally, about 24% said establishing formal center of influence relationships was their primary strategy.
The poll also gathered insights specifically related to client acquisition techniques. When asked what new business development strategies or tactics advisers were using for the first time or had only used minimally before, about 44% stated they were specifically asking clients for referrals. Only a small percentage said they were exploring direct marketing (10.7%) or traditional advertising (5.3%) to increase client acquisition.
In analyzing client acquisition success, about 37% of advisers attributed the success of new client acquisition to service-related issues with their previous adviser. In addition, 18.6% felt that the primary reason their prospects became clients was because they had decided they no longer wanted to manage their investments themselves.
“Given the service-related issues some advisers are facing, they still need to consider how efficient business management can reduce expenses without reducing capacity,” said Stephen Onofrio, senior managing director at SEI Advisor Network, in the release. “Focusing on growth is still the most critical concern, but having a client acquisition ‘process’ that integrates an adviser’s front office with their back office is also key.”