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Advisor Survey Shows Best Ways to Business Growth

September 8, 2009

by Michael Slemmer, CFA

2. Marketing – standing out in a crowded market

While most advisors (68%) believe they have a clear and easily articulated story (benefits of working with you, differentiators, etc.), the survey indicates they are not expressing it clearly in their marketing. When asked “To what degree does your marketing material tell your story and help you in selling?” only 36% said “excellently” or “very well” while 64% said “somewhat” or “not at all”.

When asked about “obstacles to obtaining new business,” 20% of the 85 respondents who commented cited marketing-related issues. Many respondents indicated that they were “working on” having a clear and easily articulated story, but this seems to be problematic for many firms. Equally interesting were comments that do not specifically mention marketing but cite obstacles that, from our experience, could be mitigated by marketing communication or tactics. These include:

  • “Increased competition”
  • “Lack of consistent prospect-generating strategy”
  • “While we often discuss how to penetrate our target markets, we struggle with the execution of our ideas.”
  • “Current economic environment has made it more difficult to attract new investors”
  • “Perceptions of structured products given impact of CDO and sub-prime market collapse”
  • “Issues of ‘new’ advisor and principal protected product”
  • “Fear, causing paralysis [by prospects/clients]”
  • “Few people outside the industry know what a multi-family office is or does”
  • “Lack of knowledge by the public regarding what different types of financial practitioners actually provide”

One respondent’s comment is a truism that seemed to sum up all the comments: “Marketing is difficult and expensive.”

The role of Social Media

There’s a lot of buzz about online networking and communication tools’ (blogging, LinkedIn, Facebook, Twitter, etc.) ability to help advisory businesses enhance brand awareness and sales, but most wealth managers still are not buying it: 58% don’t use social media at all in marketing or client communication. Among those who do, 18% use LinkedIn and just 5% use Facebook. Most comments centered on compliance concerns or the lack of value relative to face-to-face and other communication means.

3. New business development

When it comes to generating new business – specifically sales planning and execution – respondents rated their firms much lower than the quality of their marketing. Only 37% feel their firm sets and executes new business goals excellently or very well while 62% feel they do an average or poor job at this. The most-often cited obstacle to new business was “poor marketing,” followed by “lack of sales process and tools” and “no clear plan.” We solicited comments, and many of them cited problems with a lack of firm or sales leadership, a lack of time and resources to focus on sales, and poor sales skills.

We asked “How many new prospects have you had in 2009?” The average was 34 and the median was 11. Comparing this year to last, 31% of respondents are seeing higher or much higher numbers, while 36% are seeing lower or much lower.

Number of Prospects