What sets growth-focused financial advisors apart from peers?

A poll of over 400 financial advisors uncovers how marketing practices differ across advisor segments

What sets growth-focused financial advisors apart from peers?

You need to spend money to make money, as a popular saying goes — and when it comes to growing a financial advisory practice through marketing, it may very well be true.

From a survey of over 400 financial advisors, Broadridge Financial Advisors has found just 21% who self-identified as “aggressively focused on adding new clients.” Such growth-focused advisors were also defined based on their age (25 to 49 years old) and the amount they spend on marketing every year (US$5,000).

Growth-focused advisors are more aggressive

While members of the growth-oriented cohort spent more on marketing for every client they acquired, they were also more likely to achieve higher levels of AUM than other groups. That was reflected in the observed rough correlation between respondents’ annual marketing spend and their client AUM: 55% of those with under US$200 million in AUM reported spending less than US$2,500, while 70% of those with over US$200 million in AUM said they spend more than US$10,000.

“The most growth-minded advisors are separating themselves from the pack in terms of new client acquisition rates – even more than we suspected,” said Kevin Darlington, vice president of Advisor Solutions, Broadridge.

Respondents in general were more likely to focus their marketing spend on new client acquisition (60% of participants) than cross-selling of existing clients and family members (40%). Growth-focused advisors, meanwhile, were more likely to gauge marketing effectiveness in terms of revenue, as well as have confidence in their ability to meet their business goals.

Read also: How email and social media can unlock millennial market

Advisors plan a digital shift

When asked to name the efforts or platforms they pour their marketing dollars into, most advisors identified the same top four channels: website (76%), in-person events (57%), social media (45%), and CRM system (44%).

But a rise in digital marketing is in the cards, with 19% of respondents saying they plan to increase investment in social media. Another 14% said they’ll invest more in webinars, while 13% are planning to step up their digital media advertising. Twelve per cent said they intend to hire new in-house marketing staff; that number rises to 20% among advisors sitting above the US$200-million AUM mark.

“We're seeing a planned strategic investment in digital marketing among aggressive, growth-oriented advisors and firms,” Darlington said. Efforts at organic social media marketing are bearing fruit, though getting through the organic clutter is becoming increasingly difficult, making investment in paid digital advertising with the potential to target new audiences the logical next step.

Just 11% of advisors self-labelled as “innovators” when it comes to leveraging technology in their practice, but those respondents are already reporting better bottom-line benefits than the general advisor population:

  • 57% of innovators said they’ve gotten leads from their websites, in contrast to 37% of all respondents;
  • Only 9% of innovators weren’t sure they had secured a lead through their site, in contrast to 41% of tech laggards; and
  • Innovators reported that they take an average of 3.4 months to convert marketing leads into clients, compared to the 4.3 months that it takes laggards

Social media marketing, which tended to succeed through Facebook or LinkedIn, also appeared to be paying off more for innovators (59% had secured a lead that became a client) than for tech laggards (only 19% said they’d done the same).

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