Independent Financial Advisors, You Have a Marketing Budget, Right?

Independent Financial Advisors, You Have a Marketing Budget, Right?The Oechsli Institute recently conducted a study to examine the marketing spending of “elite” advisors, the majority of whom generated more than $1 million of revenue last year. The results indicated the majority of those elite advisors (57 percent) spend 4 percent or more of their gross revenues on marketing – $40,000 on marketing for every $1 million of revenue.This is notably far above the broad-based industry average found in most benchmarking studies (which is typically no more than 1 to 2 percent of revenues on marketing).

 

Marketing budgets are vital to every company. Having marketing or practice development plans define the firm’s target audience and key value propositions, while articulating their service offerings in a clear and compelling manner, are key components to success.

 

“This is not an advertising budget; it’s ‘relationship marketing.’ More akin to an expense account used strategically to schmooze existing affluent clients, referral partners, and prospects,” wrote Matt Oechsli, financial advisor coach and founder of the Oechsli Institute.

Financial advisors, in what Oechsli refers to as the “general population”, can learn some valuable marketing lessons from their elite counterparts. Oechsli says financial advisors should budget between 2 to 10 percent of the gross revenue on marketing. He recommends newer advisors with lower production numbers consider investing closer to 10 percent. “This way, a $300,000 producer has a marketing budget of $30,000 and can do a lot more than with a $12,000 budget,” he wrote.

What should marketing dollars be spent on if you’re trying to grow your business? Oechsli suggests ideas like social events in your community that might attract your affluent clients, potential prospects, and referral partners; charitable events or fundraisers that align with your target clientele; fun/intimate events you can host; social lunch and/or dinner; and sending “surprise” gifts to prospects and clients, such as birthday and anniversary gifts, special occasions, etc., to reinforce the relationship.

Few advisors – elite or otherwise – actually track all the information needed to make sure their marketing dollars are doing what they need to do. Make it a habit to revisit your marketing expenses from the previous year, develop your relationship marketing plan and budget accordingly. Tracking numbers, experimenting, and tweaking the process will help improve results and show you what you need to do to meet the numbers. Treat this like a business and make sure your investment is giving you a good return.

For more information on Summit Brokerage Services, visit www.joinsummit.com or contact us at (800) 354-5528.

Summit Brokerage Services is a member of Cetera Financial Group, RCS Capital Corporation’s (NYSE: RCAP) retail investment advice platform.

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