Winning Small-Business Clients

Securian Financial found that small-business owners (SBOs) can cite many reasons to use a financial adviser, yet only half employ one.   

In a paper titled, “Small but mighty: Growing opportunities for financial advisors and small business owners,” Securian Financial Group highlights survey results of small-business owners (SBOs). For many financial advisers, SBOs are highly desirable when building an advisory business because of the many financial services they need and use, yet they are a difficult market to target.

“Our research shows small-business owners have many financial concerns, but only half work with financial advisers,” said Kerry Geurkink, director, Annuity Marketing, Securian Financial Group, Inc. “And even then they work with advisers more on personal finance than business-related issues.”

The online survey of 435 SBOs across the U.S. shows their top financial concerns include cost control, profitability, building wealth, financial security for their families and rising health care costs. The percentage of SBOs who want outside assistance with these concerns is much larger than the percentage who actually seek and use it. In certain circumstances, such as business succession planning, personal finance, asset management and employee benefits, seeking financial advice is much more common.

Securian found recommendations from family members, business acquaintances, and other financial professionals provide the best methods to win the business of an SBO. Networking with bankers, accountants and attorneys is also important.

“Once that first meeting is scheduled, the adviser must demonstrate expertise in running a small business,” say Geurkink. “That part should come easily since financial advisers themselves are small business owners. Above all, advisers must prove that assistance from a financial consultant is an investment rather than an expense.”

Securian said it is planning to use the research to develop a “Small But Mighty” campaign that gives advisers a step-by-step approach to building their small-business clientele.

The SBOs included in the survey met the following requirements:

  • Private company ownership, sole or shared
  • At least 50% responsibility company financial decisions
  • At least 50% responsibility for household financial decisions
  • For-profit company not in marketing, market research or financial planning
  • Three to 250 employees
  • Minimum of one year as owner