Many financial advisor firms saw their assets soar during the pandemic, when early extreme volatility and a financial reckoning sent investors flocking to their doors.
Flash-forward to 2022, and some RIAs are wondering how to keep the proverbial party going in the post-pandemic world.
According to Kevin Darlington, general manager of Broadridge Advisor Solutions, there are five trends in particular that will help advisory firms spur business growth this year and beyond.
Include Your Clients In Your Brand
After a certain point, to get any scale you have to have a consistent brand and message, said Darlington.
And making the client part of the brand is important—in other words, rather than a recitation of what the advisor does, the brand should be about the client’s needs and what the brand does. Including clients in a brand is valuable because it creates a client-centric lens for the firm, which can clearly be communicated firm-wide to both staff and investors, Darlington said.
What does an all-inclusive brand look like? “I’m always in the market for a financial advisor. So I was impressed the other day when I talked to an advisor whose firm has a brand and message that is consistent with every single client they work with, whether in New Jersey or the Midwest,” he said.
The firm’s basic pitch underscores its basic philosophy, investment style and holistic planning. “The firm really values that ability to communicate clearly using messaging that is consistent with every client,” he said.
Start Prospecting Beyond Your Boundaries
Those firms in growth mode have a new hack that will help them differentiate themselves: nonlocal prospecting. In Broadridge’s survey, a growing number of firms are going well beyond their local geography.
“Advisors in one state are seeing many other states as being their target market. That changes a lot of dynamics,” Darlington said.
“The pandemic just forced us to understand you can do just about anything virtually,” he added.
Get Savvy About Ratings and Reviews
The SEC’s new ad rule allows advisors to use client endorsements and testimonials. An important wrinkle is that the updated regulation permits advisors to use performance reports and third-party ratings, which will likely mean they’ll get rated on Facebook, Yelp and other social media sites.
This will allow advisors with good ratings to attract younger clients who want to see what other consumers’ experiences are before they jump in.
Just having a rating in the early days will be a differentiator, and prospects who use ratings may very well steer clear of firms without reviews in years ahead.
While the change is positive for the industry, the ability of RIAs to do reputation management “will get a little tricky,” Darlington said.
“The more reviews become mainstream for advisors, the greater the chance they won’t all be sterling and positive, and advisors will need to learn to manage this.”
A Team Approach Doubles New Client Numbers
While sole practitioners can still be successful and profitable, ensemble practices or teams are acquiring two to three times as many clients as solo practices, according to Broadridge’s latest survey.
Advisors who want to build scale organically will require dedicated marketing, something solo practitioners may not be able to do if they’re focused on running their practice, handling compliance and dealing with existing customers.
Virtual Meetings For Adult Children And Spouses
Smart advisors are using virtual meetings to win over clients’ adult children and spouses. These meetings create trust and make it more likely that the intergenerational wealth transfer will be smoother.
Advisors should also use the medium to involve clients’ spouses, who may have been reticent to join in the past. It would be unwise to shut the wives out of virtual meetings now, Darlington said, given how many women fire their husbands’ advisors when they are widowed.