Financial Advisors Can Leverage New Ways to Grow Their Business

Financial Advisors Can Leverage New Ways to Grow Their BusinessExperts say that although referrals are great, they aren’t enough to grow an advisory business. With increased competition, independent financial advisors need to know how to market and grow their business.

A study called the 2014 Drivers of Business Growth conducted by the Financial Planning Association Research and Practice Institute found that business growth is a major challenge in today’s financial advisory businesses. Only 25 percent of advisors reported exceeding their business growth goals in the past year.

The study — which surveyed 434 professionals across the country, including FPA members and non-members, certified financial planners, financial advisors across all channels, and a wide range of business sizes and models — found a substantial gap in advisors’ current business development between where they are and where they want to be.

While the majority of those surveyed rely on client referrals to drive growth, the study also looked at what advisors who grew assets of 20 percent or more in the past year are doing. The study found three additional tactics associated with growth:

  • Centers of influence referrals: Respondents who achieved faster growth were working with centers of influence to generate referrals.
  • Client events: Using events as a way to add value for clients and attract new clients.
  • Though leadership: Building a personal brand and platform using thought leadership and social media.

“Advisors with success tend to be niche-oriented,” says Valerie Chaillé, director of the FPA Research and Practice Institute, a founder and president of SummitView Financial in Indianapolis. “They are more selective and more focused. The more intimately knowledgeable you are about a specialized area, the faster you can grow. Clients are more apt to refer you and centers of influence refer you as an expert. But it’s also scary to be exclusive, because it’s hard to turn away other clients.”

Advisors who have mastered business development have also instilled a culture of discipline at their firms, says Julie Littlechild, founder of New York-based Advisor Impact, who collaborated on the study with the FPA.

“The successful firms haven’t grown using ad hoc tactics,” Littlechild says. “They have been very strategic; they clarify their goals and take control of the business development process. Things that will happen anyway, like market appreciation, can mask real growth. There’s no magic bullet, but advisors can focus on execution and pick one or two things to work on and get better at doing them.”

Here are some strategic initiatives independent financial advisors may want to consider to gain a competitive edge and attract clients beyond the client referral.

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 that ensures you consistently deliver a great wealth management experience. The more efficient you are in your process, the easier it will be to draw in prospective clients.

Be selective. Take a lesson from top young independent financial advisors who are succeeding. They 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. You can’t be an expert in solving all investors’ varied needs. That’s why 62 percent of top young advisors say they rely on teams of experts to address their clients’ diverse financial issues, compared to approximately 40 percent for other advisors.

Create a game plan. Success doesn’t just happen, as it requires planning. Develop and implement business and marketing plans that clearly define your goals and a path to achieving them.

Use Digital Tools. The two best ways (with the highest ROI) to leverage technology is by utilizing webinars and social media. Webinars let you deliver your message directly to pre-qualified prospective clients. They are also great for demonstrating 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 as a go-to advisor over time. Using sites like Twitter, Facebook and LinkedIn for business purposes can also help financial advisors change the way they prospect for new clients.

Partner Up. A strategic alliance with professionals outside the financial advisory sector is a great way to attract new business. Demonstrate to potential allies that mutual clients will be better served if you collaborate. Consider 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.

Mix business with pleasure. Lunches and a round of golf are great, but think outside the box – like yoga, a spa day or a night of music at a piano bar. Aaron Schindler, a financial planner and managing director with New York-based Wealth Advisory Group, found a way to mix business with pleasure through sponsorship of concerts, lectures and art exhibits.

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

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

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