In writing this article, I made it a point to go through more than a dozen advisory websites from large and capable firms that I think highly of. None of them spoke about the specific client problems that spark contact—instead, they spoke about “developing coordinated strategies to provide maximum financial advantage to you.” I have spent my career in our industry, and I have no idea what that means.
Think again about the things that keep people (in other words, your potential clients) awake at night. Mostly, those are things requiring difficult decisions. “Can I help my parents financially without hurting my own finances?” “Should I pay for my son’s graduate school?” “What do I do with the restricted stock I am getting paid once it’s vested?” “My business needs more capital; should I invest it or seek investors?” “My daughter wants to go to a very expensive liberal arts college in Vermont. Really?”
You won’t see any of these questions on an advisor’s website. Instead, you will see: “personal CFO,” “investment management,” “tax planning,” “philanthropic strategies” and so on. As Harvard professor Theodore Levitt said, “No one needs a quarter inch drill. What people need is a quarter inch hole.”
Helping Consumers Realize They Need An Advisor
We all hope people will at some point reach the conclusion that they need a financial advisor. But people very rarely do. According to research from the CFA Institute, about 75% of individuals with more than $1 million in investable assets already have an advisor and only 10% are open to hiring one. Another research paper by the firm Qualtrics states that only 1.2% of customers are considering changing advisors. In other words, unless advisory firms spend some energy on creating demand, they are playing with only a small part of the deck.
Other industries enjoy print articles listing “10 Reasons to Hire a Personal Trainer” or “10 Signs You Need a Haircut.” The few articles like that for financial advisors are very unconvincing and don’t really speak to the experience of either the consumer or the advisory firms. The first Google hits on the subject say you should hire an advisor when: 1) you inherit a lot of money, or 2) when you are worried you don’t have enough for retirement. Not exactly a call for action.
Good marketing doesn’t just respond to demand but actually creates it—by increasing awareness and pointing at issues people have overlooked.
Go Beyond The Rich And Happy
We need to know what keeps someone awake at night, but too often our industry targets “good sleepers.” Rich people tend to sleep well, at least when it comes to money. Or, as a popular quote (attributed to a few different authors) goes: “Happy people don’t write poetry.” Our industry is doing its G2 advisors a disservice by insisting on only working with the ever-growing minimum of $1 million to $2 million to $3 million in assets under management.
I had a chance to interview the founder of a very successful line of food products. He’d made hundreds of millions on the sale of his business. He told me that “no one gave me any attention before I sold the business, except for the bankers who were lending the business money. When I sold the business, I got a call from everyone, and they all told me how much they wanted a long-lasting relationship with me.”
Firms that want to attract the future millionaires and billionaires need to take the risk to find them when they are still starting their businesses … and help them in that process. In Bulgaria, they say: “You count your friends when you need them.” Swearing undying loyalty to a $100 million portfolio is actually not creating much loyalty on either side of the transaction.
Unless you have some insight into picking “future stars,” you may be left with too many subpar clients who are not worth the amount of time invested in their service. To be successful in that process, you need to know your client. When you know your market, you can pick the winners.
Given all these thoughts, if I had a cadre of G2 advisors I wanted to train to develop more business, I would do these things:
1. Ask them to specialize in a growing, successful area where people are having to make complex decisions.
2. Ask them to spend years learning that business and immersing themselves in the community.
3. Learn what keeps future clients in that specialty area awake at night.
4. Write and speak about the difficult decisions their clients need to make.
5. Find the future stars in that field and go into their service before everyone else knows about them.
The happy, cheery, wealthy multi-generational family is out there. It has 15 advisors and 25 accountants and is wondering when those people will stop mailing them Napa cabernets and smoked salmon for every birthday. At the same time, somewhere there is a young family of Tableau executives who are still trying to figure out what to do with their Salesforce stock. If I wanted to grow, I know whom I would call on.
Philip Palaveev is the CEO of the Ensemble Practice LLC. He’s an industry consultant, author of the books G2: Building the Next Generation and The Ensemble Practice and the lead faculty member for the G2 Leadership Institute.