You can learn something even from your failures. I say this because I recently polled subscribers to my newsletter in conjunction with the marketing consulting firm FiComm Partners. We asked (among other things) how advisors market themselves. Are they using advanced techniques like targeted Google or Facebook ads? How much are they spending on marketing overall? Do they employ a dedicated marketing professional? Other questions related to their return on investment. We envisioned great things, like learning the true dollar cost of obtaining a client, the profession’s return on investment from its marketing expenditures and which strategies were most effective.

So how was this a failure? By the time we closed the doors, we had only gotten back about 200 responses, which is by far the lowest response rate I’ve ever experienced. A previous survey had netted 1,554 responses, and the one before that garnered even more.

What we learned — and I think this is significant — is that most advisory firms are not systematically marketing themselves. And even if they are, they aren’t tracking their expenditures and the results. So they didn’t feel comfortable filling out our nosy survey.

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Bob Veres was surprised so few advisors took his most-recent survey. The reason illustrates an industry-wide lapse.


Megan Carpenter, co-founder of FiComm Partners, was not especially surprised. By her estimate, wealth management and financial planning firms spend, on average, just 1.7% of their top-line revenue on marketing. To put that in perspective, the lowest marketing spend in the entire U.S. economic landscape comes from manufacturing firms, which on average spend about 4% of top-line revenue. Tech companies fall in the middle of the overall spectrum, spending 12% to 25% of revenue on marketing. At the high end, the CRM company, Salesforce, devotes upward of 40% of its revenue toward making the public aware of its existence.

More to the point, advisor marketing tends to be scattershot. It may include taking a center of influence to lunch, or posting interesting stuff on the website. There may be a client appreciation dinner thrown in, where current clients are invited to bring a guest or two who might be impressed enough with the advisor’s “thank you” speech to make an appointment and explore a business relationship.

If this represents the typical advisor’s marketing activities, and those expenses are not tracked as a line item on the annual budget, and the results are not tracked either, then filling out our survey would be a waste of everybody’s time.

I’m hoping that this will change — for several reasons. First, I (perhaps selfishly) want fiduciary advisors to do a better job of taking market share from their brokerage competition. The brokerage firms are devoting huge advertising budgets for 30- and 60-second ads on the most popular television and cable networks and major sporting events, telling the public that they can be trusted (or, in the case of Wells Fargo, that they are working to earn back its trust). They are effectively deploying marketing howitzers while planners are deploying the equivalent of peashooters. A more focused effort to tell the world about you and your services would accelerate the shift in market share from brokers and sales to advisors and fiduciary advice.

Second, and related to the first, I think the public is better served by receiving advice from somebody who is sitting on their side of the table, rather than somebody who is motivated to win an incentive sales award trip to Tahiti. But for people to get that less conflicted advice, they need to know you’re out there and available to provide it.

Finally (and we hope to have more information about this soon) I suspect that the return on investment is pretty high for those firms who actually track their marketing spending and results. Carpenter points out that most advisory firms expect to grow their revenue by 10% a year above the “raise” they get from positive market returns. No other profession or industry would dare expect to grow at that rate without putting marketing dollars on the table.

I asked Carpenter how advisors could build a solid marketing program from scratch, and she offered some very basic advice. First, ask yourself, why are you in this business? What makes you passionate about financial planning? Tell your personal story succinctly and powerfully in writing, and write about the most important changes you want to bring about in the lives of your clients. This simple exercise not only helps prospects relate to your value proposition; it also helps your staff understand the point of the work that they do — and gets them passionate about delivering the services that you’re passionate about.

Slideshow
Clients give top marks to Charles Schwab, Edward Jones; Wells tumbles
The research firm’s annual survey included new queries reflecting changes in the industry.

Second, define why clients would want to work with you. What benefits do they get from your services? What are the real-world, human outcomes that you try to bring about? If you look at most advisor websites, the focus is on the firm, not on the client — which is the opposite of what you see in just about every other industry or profession. The typical wealth management website provides basic information about the firm, the staff and its credentials, along with the process that it follows and a map that shows you how to get to the office.

But there’s a better approach. Tell client stories (anonymous, of course, so you don’t run afoul of the testimonial prohibitions), where you describe the presenting symptoms, the type of advice given to solve the problem, the resolution of the problem and the (hopefully positive) outcome. This does several things: it communicates the value of your advice in real-world terms, and it also helps prospects relate to how they can benefit from your services. The prospect might be facing similar challenges, and would understand that he or she happens to be the type of person you work with. “Hey, they work with people just like me, with problems just like the ones I’m facing!”

If you can make your story compelling, you’ve completed what Carpenter calls the “brand infrastructure.” Once you’ve articulated your “why” and the actual real-world value of your services, you can move on to stage two: content creation. This might include white papers that prospects can download off of your website, or videos where you answer recent questions that clients have asked you about the new tax law, recent market volatility or 529 plans and college saving strategies. If develop a regular habit of responding to those questions in video format every couple of weeks, you’ll have a wealth of information on your website in six short months.

Carpenter is an expert on some pretty advanced marketing techniques, like gaining a clearer view of your target market by using Facebook analytics, using promoted or sponsored posts that reach a very specific target audience (for example, people with more than $2 million in assets who own their own businesses and live within 25 miles of your office), and building an audience of people who want to subscribe to your content. Those strategies fall a mile or two outside of most advisors’ comfort zones, but they aren’t as hard to implement as most of us have come to believe.

The interesting thing about these marketing processes is how inexpensive they all are. You don’t need to spend 40% of top-line revenues to make the community aware of your services, and you certainly don’t need to buy Super Bowl advertisements. With just a little more effort, the fiduciary advisory community could be generating two, three, five or 10 times as much awareness and interest as you do now, and enjoy a return on your marketing investment much greater than anything we could find in the investment markets.

The result would be even faster annexation of market share from the brand-name firms that have dominated financial services with a sales model.

And even more importantly, it would get more of you interested in filling out our next survey.

Bob Veres

Bob Veres

Bob Veres, a Financial Planning columnist in San Diego, is publisher of Inside Information, an information service for financial advisors. Follow him on Twitter at @BobVeres.