Survey shows increase in use of digital marketing strategies as advisors actively seek to grow their books
The current market turbulence is spurring financial advisors to actively grow their practices – and they’re doing more of their prospecting and engagement online.
Broadridge Financial Solutions’ fourth-annual financial adviser marketing survey revealed that 63% of advisors are actively looking for new clients, while only 43% are seeing an increase in inbound prospect enquiries.
Independent Broker-Dealers (IBDs) and Registered Investment Advisors (RIAs) continue to face challenges from market volatility, increasing compliance and regulatory pressures, and a competitive environment for wealth management service professionals. These factors are forcing them to come up with creative new solutions to grow their clientele.
Kevin Darlington, general manager, head of Broadridge Advisor Solutions, said, “…digital media usage is a bright spot and continues to show upward-trending success, as advisors double down on digital strategies and maximize the use of websites, LinkedIn and Facebook to generate leads."
Despite a rise in advisors’ average marketing expenditure (US$17,433 in 2022 compared to US$16,090 in 2021), marketing's share of total income is declining, to 3.1% on average in 2022 from 3.6% in 2021.
Moreover, fewer advisors—10% against 15% in 2021—say they are extremely satisfied with their marketing return on investment (ROI).
When compared to IBDs' US$9,7000 yearly marketing budget, RIAs prefer to spend US$27,800 more on marketing.
One of the best strategies is to increase their prospect pools by implementing digital marketing.
In addition, younger advisors are more likely to take advantage of recent SEC marketing regulatory updates (43% of advisors under the age of 45 versus 30% generally) by turning to the idea of showcasing testimonials in their marketing. The percentage of advisors expanding their business outside of their local area also continues to rise (27% currently servicing non-local clients, up from 24% in 2021).
Only 28% of advisors (slightly up from 26% in 2021) have a clear marketing plan, despite an increase in marketing costs.
In contrast to their counterparts who lack a solid marketing approach, these advisors are much more likely to create superior company results.
With a planned marketing strategy, 76% of advisers are more confident (somewhat or very) than those without (61%), in attaining practice growth goals.
Additionally, advisors with a well-defined marketing strategy onboarded more than twice as many new clients in the last year: on average, 41 new clients compared to 17 for advisors without such a plan.
When it comes to marketing activities, 82% of advisors polled say that creating a marketing plan or strategy is the biggest issue, followed by finding the time for marketing efforts (81%) and maintaining compliance (79%).
The success rate of advisors in converting social media leads into clients is increasing, climbing from 34% in 2019 to 41% in 2022.
Compared to 36% of advisors without a strategy, 57% of those with a clear marketing plan were able to turn a social media lead into a new client.
Most advisors (61%) say they believe their websites could be more effective in generating leads. But out of all the listed expenditure priorities, 31% of advisors say they will increase their website investment in the coming year.