6 steps for financial advisors to create a successful marketing strategy

While market volatility, increasing compliance pressures and a competitive landscape have created a challenging environment for financial advisors seeking new clients, a defined marketing strategy can lead to greater success, according to a recent Broadridge Financial Solutions survey.

Only 43% of advisors are seeing increases in their inbound prospect requests, although 63% are actively seeking new clients, according to the fourth annual financial advisor marketing survey by Broadridge Financial Solutions.

In order to overcome these challenges, independent broker-dealers (IBDs) and registered investment advisors (RIAs) must find innovative new solutions to generate business, according to the survey.

“It has been a challenging year for financial advisors, with many struggling to adapt to new compliance and regulatory guidelines, increased market volatility, and ongoing hiring and talent retention challenges, said Kevin Darlington, general manager, head of Broadridge Advisor Solutions.

“Despite evidence that staying on offense with a sharp marketing strategy yields business growth, especially in volatile markets, we’ve seen advisors shift back to defense and fail to allocate the right level of time, money and effort to their marketing strategies,” he said.

Developing sound marketing strategy

Smart investments in marketing are having a big impact for growth-oriented advisors, separating them from their lower-growth peers, added Darlington. But increased spend without thoughtful planning and measurement just waste time and money, he said.

Advisors typically begin relationships with new clients by understanding the clients’ goals and then devising the best plan to reach those goals. Advisors’ marketing plans should be goal driven, measured and optimized as well, he said.

Darlington offered the following six steps for financial advisors to develop a sound marketing strategy that can be measured and optimized:

1. Define specific and measurable business growth goals, concretely outlining the number of new clients to be acquired and the growth of assets from existing clients.
2. Clearly define specifics of the ideal target client. This needs to go beyond just their level of net investible assets; instead, it should be a more well-rounded set of target attributes: age range, key wealth building needs, occupation(s) and much more.
3. Identify the key needs and relevant topics that are likely to engage this audience. “For example,” Darlington asked,” if you are looking for small- business owner clients, what might be key needs they have that can be leveraged into your marketing and content plans?”
4. Identify the key ways to reach and engage this audience: paid channels (advertising), owned channels (websites, social email, etc.) seminars, networking, etc.
5. “Build out your plan of how you will use your mix of content, channels and promotion to reach these prospects and connect more with your existing clients,” he said.
6. Perhaps most importantly, Darlington asked, when new prospects are engaged, “how can they be nurtured over time to become clients?”

Marketing spend up, ROI satisfaction down

While advisors’ average marketing “spend” continues to increase ($17,433 in 2022, up from $16,090 in 2021), the percentage of revenue allocated to marketing was down to an average of 3.1% in 2022, compared to 3.6% in 2021, according to the survey.

In addition, only 10% of advisors reported being very satisfied with their marketing return on investment, which is down from 15% in 2021, the survey found.

Despite an increase in marketing spend, only 28% of advisors have a defined marketing strategy, up slightly from 26% in 2021, the survey said. These advisors are far more likely to achieve better business outcomes than their counterparts who do not have a defined marketing strategy, the survey said.

Seventy-six percent of advisors with a defined marketing strategy feel confident (somewhat or very) about meeting practice growth goals, compared to those who do not have a defined marketing strategy (61%).

In addition, advisors with a defined marketing strategy have on-boarded more than two times the number of new clients in the past 12 months: this is an average of 41 new clients versus 17 for those without a defined marketing strategy.

Eighty-two percent of advisors report that developing a marketing plan/strategy is the top challenge when it comes to marketing activities. This is followed by finding the time for marketing efforts (81%) and managing compliance (79%).

Digital media 'a bright spot'

“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,” Darlington said.

When it comes to managing leads, the survey noted that advisor success in converting social media leads to clients is trending up, reaching 41% in 2022. This is an uptick from 34% in 2019. Fifty-seven percent of advisors with a defined marketing strategy converted a social media lead to a new client, compared to 36% of those without a strategy.

The majority of advisors (61%) believe that their websites could be more effective in generating leads. Thirty-one percent plan to spend more on their websites this year –the highest spending allocation of all areas reported, according to the survey.

 

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

© Entire contents copyright 2023 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.