Similar to most financial planners, I spend a great deal of time developing financial plans and investment strategies for my clients. We identify goals and objectives and put a comprehensive plan in place. That’s a common industry practice, and we are quite comfortable in that space.
SEE ALSO:
10 Questions to Ask When Choosing a Financial Adviser
p>
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What I’ve noticed in my eight years of practice, however, is that outside of the multibillion-dollar advisory firms, who tend to excel in marketing, most independent advisers don’t appear to be as comfortable with investing in their business. I’m not talking about specific physical assets, such as office space or bringing on staff, but marketing and business development—essential pieces of any successful firm.
It’s been noted that a typical advisory firm spends a mere 2 percent of its revenue on all marketing and business-development activity. While the dollar allocation certainly varies by industry, company size, culture and lifecycle stage, most companies seem to invest anywhere from 1 to 10 percent in marketing.
The U.S. Small Business Administration suggests businesses with less than $5 million in sales should spend on average 7 to 8 percent of their gross revenue on marketing. And according to a 2014 Fidelity Clearing and Custody study, advisers who are marketing leaders spend 33 percent more on business development and see 40 percent more client growth, as compared to other advisors.
Advertising, PR, and other promotional methods aside, I’ve seen a number of independent advisers cut technology costs to increase their net take-home payout, relying on traditional and possibly dated marketing tactics, such as “networking” and “word of mouth” referrals. While these avenues can and do generate business, I would argue that by spending money on the right technology tools and integrated marketing approaches, you could better engage with clients and prospects and dramatically increase your revenue. We operate in a competitive marketplace. Why not invest a little to break through the crowd?
When I went out on my own in early 2014, I made a commitment to spend the necessary dollars on business development to stand out from competition. In addition to exploring the traditional communication channels, I was and still am a big believer in branding and creating an online presence. I started out by investing money into brand development and website design and infusing technology tools, such as Tamarac Advisor Xi, eMoney, Laserfiche, and Vestorly into my practice.
I’ve also implemented content marketing strategies, such as hosting a consistent blog and publishing videos on my site, and invested in PR and advertising to help improve brand recognition and build credibility in my community. I’ve also discovered ways to leverage SEO and social media to increase visibility and capture targeted leads along the way. I certainly don’t have all the answers, but I have witnessed some great ROI from these efforts.
Of course, there are seemingly endless opportunities for paid promotion, and I’m not suggesting they should all be implemented. On the contrary, being strategic is just as important in marketing as it is in financial planning. It takes time to perfect the marketing formula, especially when it isn’t your full-time job, but with a good strategy and a bit of investment, you can break through the clutter and better connect with your potential customers.
SEE ALSO:
Reinvent Wealth Management With Technology
p>
Taylor Schulte, CFP® is founder and CEO of Define Financial, a San Diego-based fee-only firm. He is passionate about helping clients accumulate wealth and plan for retirement.
-
AI Goes To SchoolThe Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
The Four D's That Could Force You to Sell Your BusinessBusiness owners (or their heirs) can be rushed into a sale of their company if they haven't planned for a major change in circumstances — or the four D's.
-
Six Steps for Financial Advisers to Make Compliant Video TestimonialsFollowing these steps in order can help ensure you don't end up breaking any rules or having to redo your work.
-
I Found Out What It Takes for a Family Business to ThriveA handy book and my chat with the chairman of Community Coffee offer some guidance on making your family business a success.
-
Seven Steps to Build Your Billion-Dollar Business TodayThe future might be uncertain, but 'right now' is always a great time to dive in and solve someone else's problems with your new business.
-
How Business Owners Can Prepare for a Terminal DiagnosisThe most important thing is readiness, whether the owner faces a life-changing diagnosis or an employee does.
-
How Soon Can You Walk Away After Selling Your Business?You may earn more money from the sale of your business if you stay to help with the transition to new management. The question is, do you need to?
-
Tips to Help Entrepreneurs Create Self-Sustaining BusinessesWith the right processes and people in place, a truly sustainable business can be efficiently passed on to a successor and run profitably on its own.
-
How Google Reviews Can Help (or Hurt) Financial AdvisersDon't leave your Google Business Profile unclaimed — someone else can make changes if they claim it. Also, here's what you can (and cannot) do with the reviews.
