How to Acquire New Clients as a Financial Advisor in 2020
I’m so sick of the term lead that I’ve declared it a 4-letter word. Lead is ubiquitous in business and yet it’s definition is as vague as it is impersonal. In the advisory space, where we’re entrusted with managing not simply an individual or family’s personal finances, but ultimately supporting their dreams it’s past time that we drop the term from the financial services lexicon like a bad habit.
What we do is not nurture leads, but rather cultivate relationships and relationships, unlike leads, are based on trust. We’ve all familiar with the relationship piggy bank whereby you assess the value of your acquaintances, friendships, and loved ones based on the net of their emotional deposits and withdrawals. If someone makes consistent or significant withdrawals without making deposits then they’re taking more from the relationship then their giving running a net deficit and should be cut loose. While obviously not a scientific endeavor, I very much like it because as financial advisors it speaks in a language we’re all comfortable with.
I would like to posit that when cultivating a relationship it’s important/ imperative that the initial approach/ ask be a deposit and as much as you may like to think of your services as intrinsically positive and thus a deposit, your prospects often view your interest in becoming their advisor through a different lens, seeing you as a salesman first and foremost, believing they’re the product. Therefore, if your first approach is for their business they’ll view this as an attempted withdrawal.
in order to be the first mover it’s important that you give before you ask. Give something of value to build trust and credibility before you ever approach or “ask” them for their business.
Prospect Engagement: Gain Trust Before the “Approach”
How often do you feel like you’re waiting for your ideal customer to find you? Whether it’s filling seats for seminars, or Even if you have an extensive list of “Leads” who’ve been identified as ready-to-buy how do you engage them in a manner that differentiates you from all of your competition. It is so important to build trust and credibility with a client. This is why referrals are the gold standard as far as “leads” are concerned. When a trusted colleague, friend, or loved one refers you to a professional they are lending you their credibility and trust, knowing full well that if you don’t perform it will reflect on them and effect or endanger their trusted status.
Attract Millennials
As the average advisor age creeps ever upward it’s become more important than ever to attract the next generation of advisors, while simultaneously becoming more difficult than ever due to the allure of tech, perceived or otherwise. The opportunity to podcast provides a sense that your firm is not just thinking about, but adopting new tech and mediums.
Learning & Development
The most important skill for advisor and client success is the ability to truly understand your clients’ needs and dreams, both financial and otherwise. Often referred to as ‘Fact Finding’, at its core this is simply one’s ability to ask good questions and listen. In doing so you will be able to discover a clients pain points and best explain to them how your services can help alleviate their fears. This, in a nutshell, is interviewing. Like any other skill it only improves with practice.
Employee Engagement/ Retention
Supporting employees passions outside of work is an integral piece for 21’st century companies worried about the increasingly high turnover. Supporting employee passion projects is an incredible way to make sure your advisors feel like you care about them at a human level and not simply as a line item pumping up your bottom line. There’s no more cost or time effective way to do this than by providing a space and the resources for an advisor to pursue a personal podcast. You could also interview your own advisors and staff.
Identify Ideal Clients When They’re Most Likely to Be Open To An Advisor
The ideal time to get in front of a client is when they’re ready for the conversation. There are identifiable triggers including getting married, having a child, leaving a long-time employer, starting a new career, the death of family, friend, or loved one. These major moments and life events tend to cause us to think about our future in a way that the every
Build Strategic Partnership/ Referral Relationships
Many Advisors make the claim that they will act as a personal CFO, or financial quarterback, or “insert leadership metaphor here.” The reality for many is quite different. We all recognize the importance and benefit of having other professionals who work with our clientele, but struggle to develop truly symbiotic and mutually beneficial relationships. With a ‘Success’ podcast you can simply invite the successful CPA, Estate Planning Attorney, P&C agent etc. onto your show to begin developing a relationship by highlighting them and their practice or firm firstly.
If they work with the same type of clients as you do then they will be very interested to hear how you attract new clients with your show and that their target audience aligns perfectly with your podcast audience. This creates sponsorship opportunities, both free and paid. Build a team and promote all of your members through your podcast.
No Need to Worry About Compliance
Ever want to start a blog or podcast, or work with a company that promises consistent and relevant content creation for lead generation only to realize how much research, planning and time goes into creating compliance approved work (It’s often not approved!). Or you’re promised the world by a third-party marketing company only to discover they’re not an approved vendor.
One of the major problems with creating financial content is that many of your ideal customers or clients, especially the mass-affluent and high-net-worth clients only want to know enough to know who to trust. This is one of the major skillsets of the most successful people: Knowing when and what to delegate. They want to be the expert in their own field and leverage others time and expertise in areas like wealth management and financial planning. So why spend all of the time and effort to create compliance approved financial content that will only ….
If you want to target successful executives and VP’s, business leaders and CEO’s then why not create the content they’re interested in. The most beautiful part about this strategy is that you will not be giving out financial advice or even discussing financial products. In fact, there’s no need to even mention your work in the financial services industry, so there’s no issue with compliance.
Contact us today to see how we can assist you with your lead generation efforts!
Why Finacial Advisor’s should be paying attention to trends in B2B Marketing
The odd detractor aside, it should be completely uncontroversial to state that one of the, if not THE major struggle for most financial advisors and advisory firms is that of prospecting and client acquisition. Put simply, finding and acquiring new clients is hard. It doesn’t help that the industry itself is a consistent laggard when it comes to adopting new technologies and strategies. Nowhere is this more painfully clear than in the marketing department, where most firms and advisors still think and operate as if it’s the 20’th century.
This is a significant problem, as the fintech industry seems to be eating your lunch rather than helping you hunt.
Trust me when I say it doesn’t have to be this way. The very qualities that make you human make you invaluable and irreplaceable as a trusted Advisor. Similarly, the very technologies that seem like the dreaded Sabretooth ready to make you it’s dinner can in fact, when leveraged properly, be your trusted ancestral wolf companion and loyal hunting aid. So fear not, because neither automation, nor algorithms, nor artificial intelligence can replace you.
The Modern RIA: More B2B SaaS than CPA
In this article I will share with you the advanced strategies that successful B2B SaaS (Business-to-Business Software as a Service) companies employ to cut through all of the noise and get their message heard by the right people at the right companies at the right time. I’ll explain how your services as an RIA are similar to those of a B2B SaaS company, and how you can employ these strategies to similarly cut through all of the noise created by the bombardment of automated outbound messaging and the inundation and overwhelm of endless content and infinite choice. Technology, when leveraged properly, can become your greatest ally, more akin to our trusted wolf aiding in the hunt than the dreaded Sabretooth with you as the prey.
Contradictory as it may seem on its surface, my revelation is this: the services offered, as well as the nature of client relationships for a modern advisory firm and FA are much more similar to those of a B2B SaaS company than the more traditional and transactional professional services such as those of a CPA or Estate Planning Attorney or the B2C product sale that all too many firms still treat and market themselves and their services as. This being the case, it stands to reason that the same marketing strategies and tactics utilized by effective and successful B2B SaaS companies would be similarly effective for today’s Advisor.
Long Sales Cycle/ Multiple Decision Makers
In large B2B sales it’s not uncommon for the sales cycle to span multiple calls and meetings with myriad decision makers and influencers over the course of months or sometimes years.
While the idea of a prospect taking months to become a client may seem to many FA’s like it may not be worth it, keep in mind that aside from purchasing a home, hiring an advisor, and more importantly selecting the right one, is one of the most important, impactful, and potentially expensive decisions a family can make.
For clients with significant wealth the number of decision makers or influencers involved in the process will likely go beyond just the spouse. A good advisor will proactively seek out existing professionals in their prospects lives including, but not limited to their CPA, Estate Planning Attorney, Trustee’s etc.
Subscription/ Fee-Based Revenue Model
Most modern RIA/FA’s have transitioned to a fee-only model or some similar hybrid, charging a percentage of assets-under-management and often wrapping in other services, including comprehensive financial planning, based on the clients total amount of investable assets.
The beauty of this model is that it produces predictable, scalable, and over time significant recurring revenue making it an ideal business model if and when you ever wish to sell your practice or business, as a buyer will be willing to pay a multiple of your annual revenue.
SaaS companies figured this out a long time ago and along with scalability it’s one of the major reasons they command such high multiples.
Scalability
Most of the similarities discussed in this article exist simultaneously at the individual advisor level as well as the firm level, and to a certain extent this may be true with scalability, as technology allows us to better manage and automate much of the minutiae. However, I believe this particular similarity is much stronger at the firm level, as there’s no real limit to the number of clients a firm can take on, but there is certainly a hard ceiling to the number of clients any individual advisor can work with, or at least there should be if you’re doing quality planning vs simply accumulating AUM.
While having no limit to the number or types of clients you can service may seem like a blessing, in reality it can significantly hinder your growth and success. As the old adage goes “When you market to everyone, you market to no-one.”
Continuous Communication and Support
In today’s world successful Financial Planning is, in reality, life planning. And in life, as in business, things can drastically change any given day. As such, it is incumbent upon an FA to be available and provide continuous support to your clients at all times, much like any SaaS company worth its salt knows that communication and ongoing support are vital to customer success and retention. In other words, you’re always on. A late night call is not at all an uncommon experience for a trusted advisor.
Just as businesses trust tech and increasingly SaaS services as their lifeblood and livelihood, helping in all facets and aspects of the business, so too do your clients trust you, your expertise and resources to guide and help steer their ship.
High Potential Client Lifetime Value (CLV)
In the B2B SaaS industry it is common for the average client to use your software for 3 years and for many of the great companies it’s significantly larger with great upsell opportunity as your clients grow. In financial planning the average is higher, often purported to be 7-9 years. Using a conservative estimate of 5 years and a 100 bps fee, a client with $500,000 in investible assets and no growth is worth $25,000. With a growing portfolio and insurance, alternatives, and additional services the CLV potential is significantly higher.
Understanding Customers Needs is Integral to Success
I put this last, but this is the most important similarity. I am by no means saying that all B2B SaaS companies truly understand their customers pain points and need, but let’s be honest, unfortunately neither do all Advisors. What I am saying, and one of the few things in life that I’m certain about, is that all great SaaS companies and Advisors work closely with their clients to truly understand their needs and determine whether and which services would be most appropriate and valuable thereby creating a relationship based on trust in which all parties are made better off significantly reducing the likelihood of a client or customer leaving for a competitor or simply discontinuing your services.
Upselling or Expanding Services as the Clients’ Needs and Means Grow
As the needs of your client grow so do the possible services you can offer. Every marketer in the world knows it’s multitudes more expensive to land a new client than keep an existing one, but fewer tend to think about the possibility to upsell expand your service offerings increasing the potential CLV.
The Prescription
A question that every advisor faces sooner or later is “how should I position myself/ my firms services,” or more bluntly, “should I pick a niche”? For many, especially newer advisors, this question is accompanied by thoughts of dread and, understandably, questions like “how could I possibly consider limiting the pool of potential clients or the scope of my work when I can’t seem to pick up enough clients as it is?” These same questions and fears are being discussed as I write this, and similarly as you read this, amongst the overwhelming majority of founders, business leaders, and marketing and sales executives tasked with running B2B SaaS companies and there is a growing chorus amongst savvy and successful marketers that the answer more often than not is what is now being widely referred to as Account Based Marketing, or ABM.
There’s an old adage in marketing that goes something like this… When you market to everyone, you market to no one. This is the unfortunate truth for so many advisors, and likely why there’s such a high failure rate in the first three years and it makes perfect sense. When you know the least you’re trying to be everything to everyone and you lose any common theme or narrative. Human beings are storytellers and that’s how we connect with one another and that’s what you need to do in order to get a prospect interested and gain their trust. Tell them a story
This is both an understandable and common concern, but counterintuitive as it may seem, in practice identifying a target market and creating an ideal customer persona or profile can be one of the most profitable, and most liberating decisions a firm or advisor can make.
In this article I will run you through the myriad similarities I’ve identified between the SaaS service and billing model, and what you can learn from what has over the years been come to be referred to as Account Based Marketing, or ABM for short and why I believe that the fundamental tenets of ABM are so crucial to running a successful planning or RIA practice, especially if you work with, or wish to work with the Mass Affluent and High-Net-Worth community and clients.
The beauty of this model is that it produces predictable, scalable, and over time significant recurring revenue making it an ideal business model if and when you ever wish to sell your practice or business, as a buyer will be willing to pay a multiple of your annual revenue.
Given that this is one of the major decisions an individual or family is likely to undertake in their lifetimes and that they’ll likely pay their advisor to the tune of tens if not hundreds of thousands of dollars over the course of their relationship, and if you do your job well hopefully they’ll only have to make it once, most shopping for an FA do not take the task lightly. Therefore it can often times lead to long sales cycles with multiple meetings and the need to engage multiple stakeholders, or decision makers. As your clients’ personal CFP, financial quarterback, or whatever metaphor you wish to use to position yourself as a valued leader of their financial future it is imperative that you engage, at a minimum, the spouse, as well as any existing trusted advisors and professionals they work with that may be consulted whenever you propose financial solutions or give advice. These stakeholders can include, but are not limited to the CPA, Estate Planning Attorney, Trustee’s, Parents, business partners, etc.
As the needs of your client grow so do the possible services you can offer. Every marketer in the world knows it’s multitudes more expensive to land a new client than keep an existing one, but fewer tend to think about the possibility to upsell, or in ABM “expand” your service offerings once in. This is another huge difference between financial planning and more transactional B2C product or service offerings.
