Displaying items by tag: clients

Based on the results of a Broadridge survey fielded between September 29th to October 10th, advisors with a marketing strategy brought on an average of 41 new clients, compared to 17 new clients for advisors without a strategy. The survey queried 401 advisors overseeing at least $10 million in client assets. The survey also revealed an increase in marketing, as advisors spent an average of $743 in marketing for each new client and added 23 new clients on average over the past 12 months. Those figures are both up from last year when the average advisor spent $719 per client and gained 21 new customers. Kevin Darlington, general manager, and head of Broadridge Advisor Solutions had this to say about the results, “Having a defined marketing strategy, that is the single biggest differentiator [for] how the advisors that are reaching their growth goals [are] doing it. They're much more confident in reaching their goals, they're acquiring clients, and they're just getting much better ROI on their marketing.” The survey underscores the benefits of a well-executed marketing strategy. Gordon Abel, chief marketing officer of Dynasty Financial Partners, told Financial Advisor IQ, that “Advisors also need to remember that a marketing plan requires careful thought and patience.” He added, “Building awareness means familiarizing potential clients with the advisor's brand and name. They need to understand who you are and what you do.”

Finsum:A recent study revealed that advisors who have a well-executed marketing strategy get 2.4 times more new clients than advisors who don’t.

With studies indicating that the advisory industry’s organic growth rates are near zero, Gary Foodim, chief marketing officer for Mercer Advisors, believes it’s time to bring a renewed focus to marketing. Firms are facing a more challenging environment now. Advisors are dealing with rising inflation, higher interest rates, and market volatility that have slowed down the decision-making time of consumers. In addition, the competitive environment has also increased with an influx of low-cost financial advisors. Due to these challenges, traditional referral activities may no longer be enough. So, Foodim is recommending advisors embrace digital marketing for more leads. He noted that “A strong digital client lead generation engine requires three important things rooted in a ‘test and learn’ approach. First, firms need to refine their message and target audience – are you targeting the right people, and are you doing it with a differentiated message?” He also believes that firms should be open to testing various digital lead sources including paid search, social ads, connected TV ads, and nurturing email campaigns. Firms should also conduct audience testing through lookalike audiences, where you create groups of people who look like your current clients. This can be done through outside marketing firms or on social media platforms such as Facebook. Finally, firms should develop an internal sales team to follow up and convert these leads into clients.

Finsum:With increased competition and a challenging market environment, referrals may no longer be enough, which is why advisors should embrace digital marketing as a way to generate new leads.

Direct indexing was a hot topic last year as personalization gained steam. It is expected to continue to gain popularity with investors still dealing with inflation and recessionary concerns. Investors want an investment strategy that not only combats market volatility but also addresses their personal situation. According to a 2021 McKinsey study, consumers don’t just want personalization, they demand it more than ever. Investment advisors are recognizing this and looking for ways to incorporate personalization into their clients’ portfolios. Based on the results of Schwab’s 2022 Independent Advisor Outlook study, more than half the advisors surveyed anticipate clients to expect more personalization of investment portfolios. Millennial investors are leading this trend. While personalized portfolios were historically designed for ultra-high-net-worth investors due to high account minimums, advancements in financial technology have brought these offerings to investors of all means. With personalization, investors can have more control over their holdings matching their specific views. Plus, it might also lead to better investment outcomes. Poor investing behavior such as making decisions based on emotion can lead to poor results. With a personalized portfolio, investors are more likely to stick to their strategy when markets get volatile.

Finsum:As inflation and a potential recession remain on investors’ minds, advisors expect their clients to ask for more personalized portfolios.

While leads are the lifeline for any advisor, having a great selling proposition can help put advisors over the top. One advisor, in particular, realized fixed income was becoming a key part of his growth. RBC financial advisor Aaron Howe, who’s known among his colleagues as “the equity guy,” found that getting more involved with fixed income is helping him to develop and strengthen relationships with clients. The timing certainly makes sense as yields on bonds have risen with the Fed pursuing a tighter monetary policy. Howe even leads with fixed income as he talks to prospects. He believes that it’s a “win-win.” His clients are more engaged when they hold bonds from the cities and states in which they live. It has also provided him with more touchpoints with his clients. Howe stated, “People often love buying a school bond because they feel a personal connection to the investment.” Fixed income has also allowed him to take advantage of the market. He stated, “Any opportunity you have with your client to show them you are doing something for them to take advantage of the current situation– whether it’s rebalancing or tax loss selling – that’s what they’ll remember down the road.”

Finsum:A financial advisor was able to grow his practice and get more engagement with clients by getting more involved with fixed income.

In a recent interview with ESG Clarity, Morningstar CEO Kunal Kapoor offered his thoughts on direct indexing and how custom features could lead to more people being interested in investing. Kapoor mentioned that while separate accounts were always touted as providing customization, in reality, most separate accounts did not provide much customization. That’s why he is so excited about direct indexing. He stated that, “the cool thing about building a direct index is that at the start, the adviser’s having this conversation with the client, not only about the risk profile, risk tolerance, time horizon – but suddenly the conversation is about preferences.” He believes that these preferences get clients engaged with their advisors. He said, that it can “allow an adviser to really drill into an individual’s preferences in an educated way – really walkthrough for the individual what the pros and cons are of implementing those preferences in a portfolio.” Kapoor also compared direct indexing to passive investing. He believes that while passive investing can be good for most people, it can take the fun out of investing. Direct indexing, on the other hand, has many of the benefits of passive investing, but it brings back the fun of making choices.

Finsum:Morningstar CEO Kunal Kapoor believes that direct indexing creates more engagement between advisors and their clients since it requires them to discuss preferences.