A new study from Charles Schwab indicates that 67 percent of advisors rank asset growth as a top priority in the next few years. Yet, competition is growing and it’s getting harder to stand out, say advisors. Being creative in finding new clients is essential.
Advisors are “well aware of the growing importance of the next generation of clients to their businesses,” according to the semi-annual Independent Advisor Outlook Study.
To remain competitive, advisors need to keep growing. What can you do to attract new business in the new year? John J. Bowen Jr., founder and CEO of CEG Worldwide, a global training, research and consulting firm for advisors in San Martin, CA, offers some strategic initiatives to help give you a competitive advantage and attract clients in 2015.
Be Systematic. Investors often say their financial advisors don’t have a compelling or easy-to-understand method for working with them. You can differentiate yourself by having a clear, systematic process which ensures you consistently deliver a great wealth management experience and the more efficient you are in your process, the easier it will be to draw in prospective clients.
Think Younger. Financial Planning released a study, last year, which identified a small group of advisors who have fewer than five years of experience, but already manage at least $50 million. These young advisors have figured out how to build a great business from the get-go.
Whether you are a newbie or a seasoned vet, their strategies offer some great insights into how to run an elite practice. For example:
- Be selective. Top young advisors are more likely to set minimum account requirements for new clients. As a result, they are also more likely to work with clients with $1 million or more in assets. These advisors see that working only with clients who will be profitable, whom they enjoy, and whose needs they can address effectively, is an absolute must for serving them well.
- Don’t try to do it alone. These advisors also understand no one person can be an expert in solving all affluent investors’ varied needs. That’s why 62 percent of top young advisors tell us they rely on teams of experts to address their clients’ diverse financial issues, compared with around 40 percent for other advisors.
- Create a game plan. Top young advisors recognize success is not a happy accident, but a result of planning. Indeed, they are the most likely among advisors we surveyed to have developed and implemented business and marketing plans to spell out their goals and the path to achieving them.
Use Digital Tools. Technology is a huge enabler of success — if used intelligently. Two of the best (and highest ROI) ways to leverage technology are webinars and LinkedIn.
Webinars give you the power to deliver your message directly to pre-qualified prospective clients. You can speak to the exact investors you want and present the specific information you want to provide.
Webinars are also great ways to demonstrate your expertise to prospective clients. By presenting targeted and intriguing content to large groups over the web, you will be seen as highly credible and, over time, as a go-to advisor among those people.
Likewise, LinkedIn has risen to the top of the ranks of social media sites when it comes to helping advisors attract clients. Because LinkedIn is optimized in online search results, it helps you get noticed when prospective clients do their homework on you. It’s also a great platform from which to share your personal story about what motivates you to help investors. You can use it to communicate your expertise to ideal prospects in ways to make them seek you out.
Also, use social media to network. Using sites like Twitter, Facebook, and LinkedIn, for business purposes, can help financial advisors change the way they prospect for new clients. “It’s about listening and interacting with those in your network,” Clara Shih, co-founder of Hearsay Social, said at an August 2013 LIMRA social media conference. “A lot of the benefit is from advisers connecting to those who you know, but aren’t yet clients.”
Change Your Words. Use language to build trust with prospects and clients and create stronger engagements from the first interactions. For example, a large part of fostering trust is moving conversations away from market and return data and instead stressing context. Rather than starting a conversation with a bunch of facts, tell the prospect or client why you are going to give them the facts, focusing on their own goals and long-term plans. This will make it easier to have a future conversation including facts and figures.
In addition, don’t make big and bold statements which might not sound credible. Don’t overpromise or puff up your abilities. Anticipate the objections a prospective client will raise and address them proactively. Think about areas where you have weaknesses, or perceived weaknesses — such as high fees or a potentially confusing investment process — which you can shut down by getting out in front of them. If you acknowledge a perceived negative up front, the prospect will actually trust you sooner.
Partner Up. Strategic alliances with professionals who serve the affluent — CPAs and attorneys — have become a hugely effective way of garnering new business. To be successful, you need to clearly demonstrate to potential allies your mutual clients will be much better served if you collaborate. You also need to go into the process with the intention of creating some sort of economic glue, such as a revenue-sharing agreement. This tells potential partners you have a vested interest in helping them grow.
Business is about relationships. Building relationships with other professionals is a great way to attract new clients in 2015. Look to partner with local staffing firms, local colleges, real estate agents, insurance agents, relocation specialists, executive recruiters and life coaches. Offer to host a monthly financial workshop and networking events.
Another great way to attract clients is to focus on a niche market. Many in the investment advisory sector think that marketing themselves and their brand to the widest possible audience is the path to success. Niche markets are the most popular growth strategy, accounting for 25 percent of growth strategies deployed by advisory firms. Serving a niche allows advisors to focus on meeting the needs of a smaller group of customers, without compromising their chance to increase the appeal to a broader market. Niche market firms focus on a particular client group – for example: women, divorcees, a targeted association, or international professionals.
Successful financial advisors who identify and serve these markets share a common trait: a deep understanding of their customers and their customers’ needs and they commit to staying engaged with those customers on a regular basis by producing quality, innovative products and services through various avenues, which not only focus on winning the business, but provide an education.
Mix a little bit of pleasure with business. For example, Miami-based Singer Xenos Wealth Management’s SX Women’s Group proactively addresses the financial needs of women by providing opportunities through various events for women to network and expand their understanding of the investment process. The group hosts various educational and social events for clients, their guests, and qualified local residents.
AXA Advisors in Syracuse, NY, hosts a regular Sunday afternoon Women, Wealth & Wisdom Spa Event program where prospects receive free manicures and pedicures while participating in a give-and-take discussion about finance. Advisor Kristine Hartland of Peace Wealth Management in Largo, FL, targets potential clients through her running community. She invited members of her Fab 50 team – a group of female runners who meet weekly – to a Health & Wealth Spa Party, hosted by the firm. Guests got to choose a manicure, facial, or massage while enjoying healthy foods and drinks. Hartland also spoke to the group about women and finances.
Financial Planning recently featured advisor Hugh Anderson of HighTower, in Las Vegas. His firm recently held a fun client event which turned out to be a particularly well-received prospecting event. His team rented out a local movie theater and invited both clients and prospects to a private, family-friendly movie night – with popcorn and all. Many clients brought their grandchildren and appreciated the opportunity to do something fun with their families, according to Anderson.
Anderson says the event offered a different way for prospects to get to know the firm. “They got a chance to kick the tires and see what our clients thought about us,” he told Financial Planning.
Summit Brokerage Services is a member of Cetera Financial Group, RCS Capital Corporation’s (NYSE: RCAP) retail investment advice platform.
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