Marketing Yourself

As a financial advisor, you’re probably spending more of your time these days trying to placate clients. But here’s something you should also be doing—stepping up your marketing efforts.

According to a 2007 Rydex AdvisorBenchmarking survey only 39 percent of advisors reported having a marketing plan in place, and probably even fewer have one today given the turmoil in the market. Indeed, many advisors are so concerned about keeping existing clients they haven’t invested the time to develop new outreach and marketing strategies—which may be a costly mistake.

“This is the time to be proactive,” said Ray Sclafani, founder and president of ClientWise LLC in Tarrytown, N.Y., a leadership and coaching firm for financial professionals. Advisors “need to replace the assets they’ve lost,” he said.

To be sure, there are many reasons advisors don’t do a good job of marketing. Some feel it’s too big a project to undertake, even though it could, and should, be broken down into smaller pieces. Others believe—erroneously—that they don’t need it because they get the bulk of their business through referrals. “How do you get a referral when you just lost forty percent of somebody’s money?” said Mark Matson, an advisor coach in Cincinnati, who helps reps market themselves.

And still others think of marketing as simply running ads in the local newspaper. But it is “much broader and much more strategic,” said Sam Richter, senior vice president and chief marketing officer at ActiFi Inc., a firm in Plymouth, Minn., that helps advisors market themselves. Good marketing, he said, includes making clients aware of what you stand for. “Once your clients understand what separates you, you’re going to get higher quality, and frankly more referrals,” he said.

Of course, some advisors will argue that they are spending so much time putting out fires that they don’t have time to devote to marketing. Taking a calculated approach can be helpful, Sclafani said. First identify which clients are at risk, which are questionable, which are engaged, and which are truly advocates and will support you, he said. “Once you have greater confidence that your current book is sound, you can look at outreach.” He also recommends that advisors set simple, measurable goals such as net new households or activity goals. Doing this helps make marketing a smaller, more manageable project, he said.

Another thing to do is segment your clients. Figure out who you like working with the best and who the most profitable clients are, which is key to figuring out your target audience, Richter said. Once you do this, identifying marketing opportunities becomes easier. For example, say you’d like to target dentists in Minnesota. The best way to reach them is probably not a radio ad, but what about a local business journal focused on dentistry? Is there an association you can join? Is there a trade show you can attend? “It all starts with figuring out who you want to target,” Richter said.

Right now, for example, might be a good time to seek out clients who are unhappy with their current advisor, said Sclafani of ClientWise. He’s seen research showing that anywhere between 76 and 82 percent of affluent households in America are actively looking for new advisors. “Even if it’s 50 percent, guess what?” Sclafani said.

When it comes to the actual marketing, there are many approaches advisors can take, and not everything has to cost a lot of money. Matson, the advisor coach in Cincinnati, finds what he calls “point of entry events” the most successful. Dinner events, golf outings, and wine tastings fall into this category—where 50 to 100 people get a face to face introduction to the advisor, which is more effective, he said, than simply getting a name from an existing client. These events can be done on a large or small scale and if done properly the return on investment can easily wipe out the cost.

Let’s say you do a middle of the road event—a nice dinner for 50 to 100 people where you spend $5,000. If you get four clients from that with an average of $250,000 each to invest, that’s $1 million under management, of which you make about 1 percent. So now you’re making $10,000 a year off that event. Over five years, that’s $50,000 from a $5,000 investment.

“Advisors often look at marketing as an expense, without calling it what it really is, which is an investment,” Matson said.

Seminars can also be a good marketing tool. Executive coach Sclafani recently worked with a million-dollar producer who hosted a seminar geared to executives who were concerned about losing their job or already had. She created a networking event by inviting companies in the area that were looking to hire. In addition, she spoke about portfolio recovery and bear market strategies. The advisor, who hadn’t done a seminar in 10 years, had seventy-four attendees, Sclafani said.

Public relations and marketing professional Shari L. Peyser who has worked with several advisors tells clients to be consistent. “If you are doing seminars, don’t do one a year—do six and do them consistently so that people come to know where they’re likely to see you,” said Peyser, whose company is based in Melville, N.Y.

Getting known in the community in which you live and work is another solid way to build business. For example, Rotary, Kiwanis, and Chambers of Commerce are among organizations constantly in need of experts, said Drew Stevens, president of Stevens Consulting Group in St. Louis, Mo.

Lunch and learns also work well. “These concise information sessions last no longer than thirty minutes during a corporate luncheon and feature your content. Benefits are a live audience, interested attendees and low cost of acquisition,” Stevens said.

There are also many media opportunities on the Interest, radio, or in newspapers and magazines where you can reach hundreds to thousands of people. “We tell advisors: if the market is on everybody's mind, then why aren't you?” said Alana Schofield, president of AdvisorPR in Henderson, Nev. “We've seen great opportunities for advisors to work with their local media as a resource on explaining financial strategies for this market, the new administration, and the impacts of the times—layoffs and rollovers, loss in retirement account value, etc. Now more than ever local media is tapping into financial experts to help make sense of this economy.”