Just about every benchmarking study reports the organic growth rates of independent advisory firms are close to zero when you subtract what their clients have gained in the market (or otherwise the firms have gained just a few percentage points). Given that statistic, we realize now is the time to bring a renewed focus to marketing.
It’s clear that there’s an opportunity for our industry to more actively embrace and adopt modern, digital marketing strategies and approaches, things that are proven to work in other industries (and even ours on a smaller scale). I didn’t come up in the financial services industry, but my experience includes more than 20 years in consumer and brand marketing for a number of the largest media companies in the country, and I have always been intrigued by the art and science of generating new clients.
The wealth management landscape has changed dramatically in just a few short years, as advisory firms are now faced with a much more challenging environment, on multiple fronts, in trying to drive organic growth. Consumers are taking longer to make decisions in the current macroeconomic environment amid rising inflation, higher interest rates, and market volatility (which is expected to continue). They’re waiting to see what will happen next before they make financial decisions like hiring you. Meanwhile, your competition has also increased sharply in recent years as an influx of low-touch, low-cost financial planners and wealth managers promise consumers a lot for a little.
Unfortunately, traditional referral activities are just not enough to make up for the client churn, nor do they make up for the assets you lose when clients take money out for retirement spending as they age. Both trends weaken advisors’ organic growth—even though such growth is a key element to help them weather the storm.
Organic growth is not an “if you build it, they will come” endeavor—it is a science that requires a structured and methodical data-driven approach. It may also require you to leave things that you considered to be absolute truths behind if the numbers don’t support them.
How To Approach Direct-To-Consumer Growth
A strong digital client lead generation engine requires three important things rooted in a “test and learn” approach.
First, your firm must refine its message and target audience. Are you targeting the right people, and are you doing it with a targeted message? The addressable market for wealth advisors is large, so by starting with a clear audience (which you can expand) you lessen the risk of spending a lot of money on something that may not work.
Second, your firm should be open to testing a wide array of sources to glean digital leads, including paid search (ads in search engines); paid social (ads on social media); CTV (ads that appear within streaming content); retargeting (advertising to visitors of your site who did not become leads); and nurturing email campaigns (which deliver content to leads who did not become clients). Nurturing campaigns are a great way to amortize the cost of your lead generation marketing, since you already paid for the lead, even if they didn’t convert. By simply emailing these leads, at little cost to you, you can likely find new clients, and that will help you drive down your cost-per-lead expenses. When you study the results of these campaigns, you can learn what is working, and optimally allocate your resources toward those channels.
Next, your firm must conduct audience testing. Here, you focus on the benefits you bring to your target markets, uncovering the key messages that succeed in getting investors to seek you out. This can be done by creating “look-alike modeling,” which is where you create groups of people who look like your current clients and then find them through the campaigns I discussed earlier. If you don’t have the resources to create a look-alike model, you can turn to audiences already created in various social media platforms. Meta, for example, has audiences of art collectors, and you could also target, say, doctors on LinkedIn.
Finally, and probably most important, your firm must develop an internal sales team that can follow up and turn leads into clients. While your firm might not be big enough to hire new people specifically for lead management, someone in your ranks can dedicate part of their time to focus on it—by calling leads quickly, qualifying them and possibly closing the business. People who proactively reach out to you are usually high quality leads. If they aren’t followed up with immediately, they can quickly lose interest and move on, meaning you’ve missed an opportunity, and too many of these lost chances will likely severely dampen your marketing ROI.
When you use these channels, the clients may or may not be aware of your firm, which means the client experience you offer in the beginning of the relationship is critical. In fact, the first six months are key to creating a satisfied and loyal client who can end up being a happy referrer for you. That begins with the onboarding. What is your process for it? Is it digital, seamless and frictionless—with a minimum of paperwork—so that they start to experience the benefits of your planning and investing process immediately? If not, be sure to address this.
Without a doubt, there is real work and investment required to regain your organic marketing muscles, so discipline, commitment and patience are most certainly required. However, our experience has shown that building out your organic growth engine gets rewarded in your increased business value and in your ability to attract the industry’s best advisors to your firm, people who want to grow with you.
And eventually, your organic growth can come out in an even stronger position once market cycles recover.
Gary Foodim is the chief marketing officer for Mercer Advisors and a former Condé Nast senior executive.