Direct marketing is a waste of money for financial advisors, claims a new survey of advisors and clients.

None of the clients with assets between $250,000 and $2 million said they found their advisors through mailers, cold calls or information sessions, according to the survey of 250 advisors and clients by Atherton Consulting Group, which advises investment management and wealth management firms.

“This suggests firms should carefully evaluate the return on investment on these tactics,” the Atherton report stated.

A better investment of resources for client recruitment, the consultants said, is for advisors to build their reputations in their marketing area through actively seeking interviews from the press and networking through community groups.

“It makes sense that prospects would come to trust an advisor through joint participation in a community activity or from monitoring their personal branding efforts such as blogs, interviews, editorials, etc.,” the report said.

In terms of gaining new clients, advisors were twice as likely to report that referrals from family members were a source of leads
than actual clients.

Another key finding was financial advisors are failing to give clients the bottom-line fee disclosures they want.

In the survey, 81 percent of clients said they were looking for an approximate calculation of fees based on their portfolio while only 44 percent of advisors say they offer this.

The study also noted investment recommendations
take precedence with clients, with retirement and tax planning ranking a distant second and third in priority.

The results are based on a survey of 250 advisors and clients in the U.S. and Canada in September and October 2012.