Financial advisory practices are businesses like any others, and those not affiliated with larger institutions need to come up with their own marketing plans. However, many simply don’t have one.
According to the 2014 FA Insight Study of Advisory Firms: Growth by Design, sponsored by TD Ameritrade Institutional, only 50 percent of surveyed firms developed an annual marketing plan. Furthermore, the study found that just 32 percent of firms had a position dedicated to marketing or new client growth.
CNBC.com spoke with several advisors who do use formal marketing plans, some on their own and some with professional staff.
Jon W. Ulin is a certified financial planner, managing principal of Ulin & Company Wealth Management and a sole practitioner. He has developed a very detailed marketing plan that follows a simple template.
1. Target your market. “You can’t be everything to everybody,” Ulin said. His marketing focuses on four specific audiences: baby boomers, retirees, corporate high-tech employees and women. This especially adds credibility on LinkedIn, he said. “It allows you to say ‘I’ve got 20 other clients just like you.'”
2. Identify your value proposition. In other words, what makes you unique in what you do. “I work for myself, not for a big bank; I’m a CFP; an independent, fee-based wealth manager; and I deliver exceptional service,” he said. “I’m selling myself, and I need to be crystal clear on what I’m selling, because it’s intangible.”
3. Develop and execute your plan with explicit strategies and goals.Advisors should aim to attend or sponsor up to 24 community and networking events and run 24 client and prospecting events per year, Ulin said. “Return on investment is the most important thing— determine the top five or six activities, and tweak the plan for the following year.”
Since 2008, Ulin’s revenue has grown at least 15 percent each year. Does he attribute some of that growth to his marketing plan? “Absolutely,” he said. The six-advisor team at Woodward Financial Advisors also develops and implements its own marketing plan.”We have created a culture of business development in our office,” said James R. Miller, CFP, the firm’s president. “That means that we view marketing as a responsibility of every team member, not just one ‘rainmaker.'”
Each advisor has what the team calls a personal marketing plan, which consists of a handful of marketing activities they need to perform each month. These activities are self selected and consist of ones that are comfortable for each individual.
For example, Miller teaches a retirement-planning class at a local university, another colleague has networking lunches with a local accountant, another writes blog posts about finance and yet another attends local alumni club events.
He says this team strategy, implemented in 2009, has definitely contributed to the firm’s growth. In the past six years, the firm has grown from $40 million in assets under management to $200 million today.
“If everyone is responsible for business development, the firm will grow faster,” Miller said. “You’re harnessing more energy and utilizing different skill sets.”
“We were a successful practice, but we only had an informal plan, said Daniel P. Lash, a CFP with VLP Financial Advisors. “We got to a size where we decided we needed to formalize it.”
One year ago the firm hired a full-time business development specialist, Belle Schneider, to enhance the marketing for the organization’s retail financial advising business and create marketing plans to grow its other two business lines—succession planning for retiring advisors and corporate 401(k) plan consulting.
“Over the past 15 years, we had good ideas, but we weren’t able to implement them—there wasn’t enough time,” Lash said.
In the past year, Schneider has changed the company logo, made the firm’s marketing material more professional, improved the website, created consistent messages and campaigns, arranged seminars and placed ads in local magazines. She is also being mentored by Lash to become a para-planner and, eventually, a financial advisor.
“Without her, it would have taken far longer to get all this accomplished,” Lash said. “We could have hired an outside firm, but they don’t necessarily understand our business. She understands what we do for a living.”
Pence Wealth Management has had a dedicated marketing department for several years, headed by marketing director Anne Godfrey. The annual marketing budget is about 4 percent of the 14-year-old firm’s revenue.
“Our objective is to have a firm-wide, unified message for every advisor,” she said. “We want to allow the advisors to be advisors—they’re not marketing specialists.”
Marketing activities, planned 12 months ahead, fall into several categories:
1. Marketing to existing clients.
2. Prospecting marketing events.
3. Website and social media.
4. Media relations and speaking engagements.
5. Promotional items.
6. Advertising compliance with the broker/dealer.
Godfrey uses Salesforce to generate an extensive number of daily, monthly and yearly marketing analytics. Metrics include numbers and sources of leads; closing ratio of prospects into clients and resulting assets under management; numbers and types of contacts to existing clients; and numbers of speaking engagements.
Her marketing philosophy is simple: “Try it. If it works, continue with it,” she said. “If not, move on.”