The most successful way for advisors to gain new clients is through referrals from existing clients, according to a survey released Tuesday by Advisors Trusted Advisor.
While referrals were reported as the most successful way to gain new business, the most popular marketing tactic was face-to-face networking at client events. The second most successful way to gain new business is through referrals from other professionals. The second most popular marketing tactic was speaking at seminars.
Social media and cold calling ranked last on advisors' lists of favorite marketing tactics, but ATA principal Mike Slemmer noted that social media does play a part in advisors' practices.
"Comparing these data to ATA's 2009 survey on business building, LinkedIn use has more than doubled and -- more significantly -- those responding that their firm disallows social media use has been halved, to 33% from 65%," Slemmer said in a press release. "Moreover, the comments reflected a wide range of uses for social media that we didn't see in the 2009 results."
Firm owners or principals are still the main source of sales for survey respondents, but the rate fell from 56% in the 2009 survey to 52%. In 2009, 10% of firms said dedicated sales executives were their main source of sales; in 2010, 16% of respondents agreed.
"This reflects what we are seeing -- that more advisors are realizing that effective sales skills, and those people that have them, are increasingly necessary to growing a business in the very competitive wealth management industry," Slemmer added.
Full results from the survey were not immediately available. ATA surveyed 262 advisors in November and December 2010 to compile the report.