5 Strategies to Grow Your Firm
While advisors focus their time on helping clients with long-term financial needs, only a small minority take the time to establish a plan for the future of their firms, according to TD Ameritrade.
To help get advisors thinking about strategic planning, the company recently unveiled its "Breakout Growth" program series highlighting key trends of successful firms based on the 2014 FA Insight Study of Advisor Firms sponsored by TD Ameritrade.
Here are five strategies, common among top firms, that advisors can institute to expand their firms.
Click through to view these initiatives or click here for a one page version.
Advisors should consider developing a well-defined niche market, according to TD Ameritrade. “This may be counterintuitive,” admits Jim Dario, managing director of TD Ameritrade Intuitional Products and Strategy. While it may limit the number of clients in a firm, it will increase loyalty among those clients, he explains. Dario says that 76% of firms that have developed a niche have increased their referrals substantially.
Too often advisors think of a niche in generic terms, says Vanessa Oligino, senior product manager for RIA Practice Management at TD Ameritrade. A niche is more than just targeting “female executives,” she says. Instead, when advisors look to develop a niche they should “be an expert” on those clients they wish to cater to.
Advisors who make a connection with their niche audience prove to potential clients that they can offer something other advisors can’t, according to Dario. He also explains that a firm’s brand must stay consistent.
“Your website should reflect your firm,” says Oligino. She also warns advisors to make sure their LinkedIn pages are up to date along with any social media pages associated with their firm.
Creating a positive relationship with clients will lead to more productive client introductions.
“Many advisors are reactively waiting for referrals,” says Oligino. This is a mistake, she says, suggesting that advisors should be proactive and in many cases look to their existing clients to become brand ambassadors.
Advisors should ask themselves ‘How can someone in my network become an advocate for my firm?,’ she says. TD Ameritrade points to an Oeschsli Institute study from 2010 that states 70% of affluent investors will offer up an unsolicited introduction “if they like, trust and respect” their advisor.
“A lot of people feel forced to network,” says Dario. This is why he suggests creating a unique experience and limiting the number of clients at an event. According to 2011 Oeschsli Institute study highlighted by TD Ameritrade, 72% of wealthy investors said they are likely to introduce friends to an advisor if that advisor relationship was both business and social.
“Don’t just invite people to a wine tasting,” says Oligino. Instead she suggests bringing a small group to an event that would make them feel comfortable to network. When determining who to invite, Oligino says advisors should include 25% of the participants as strong advocates who will talk you up to prospective clients.
When it comes to pricing, many advisors are nervous about hiking up fees on long-term clients even if they have increased the amount of services they provide.
“Those who explain it the right way haven’t had client backlash,” says Oligino. She tells advisors to explain that it’s not all about managing money.
“If you don’t spend the time to identify to clients what it is you do, they won’t necessarily understand what you’re doing for them."
Advisors spend plenty of time focusing on their clients' long-term plans, but what about the future of their firms? Here are five strategies, common among top firms, that advisors can institute to expand their practices.