Blowing your own Horn

There’s an old proverb that says a good scare is worth more than good advice. To those who would listen, Hurley and Slowik warn that those advisory businesses that continue to focus solely on improving the quality of their advice instead of capturing new clients “will likely no longer exist.” But if a planner can’t, for whatever reason, rely on referrals and lacks the ability, financial and otherwise, to do a professional marketing job, how will he spread his own good word and avoid crippling his career or letting it fall into oblivion?

Going Guerrilla

Selling oneself doesn’t have to be expensive, Sincere maintains, if the advisor is willing to spend some time engaging in what he calls guerrilla or grassroots tactics. It doesn’t cost thousands to support your local community, or attend Chamber of Commerce meetings, or create some upscale direct mail letters. “Hire a freelance writer to write your letters for you at $50 per hour,” he says, “and suddenly you’re in business for less than $600.” Sincere is also big on barter. “Go to the local printer and trade your financial planning expertise for his services in the form of letter printing and brochures. Look for people to have strategic alliances with, and make a deal so both of you win.” Web sites can also work inexpensive wonders. “A good Web site will help justify who you are, and to not take advantage of this is a big mistake,” he says, adding that many advisor sites are woefully unprofessional.

“Marketing is like trying to turn this gigantic millstone,” offers Kiely. “It’s so hard to get going, but once it starts moving, it moves on its own.” Kiely, like many successful planners, doesn’t launch direct mail programs or print or TV ad campaigns. He tried direct mail and concluded that it works better for the commission planner who can share expenses with, for example, a mutual fund company, but that for a fee-only planner such as himself it is simply too expensive. Holding seminars works better for commission planners for the same reason, he discovered, and for the fact that if an advisor is not a good public speaker, a mutual fund rep usually can be counted on to “do the talking without upstaging the planner.” Instead, Kiely relies on public relations, which he finds low in cost and high in results. “I will do whatever I can to get my name in the press,” he says.

Kiely’s marketing efforts began the day he decided to make Worth magazine’s best-advisor list (which he did), as an antidote to his dissatisfaction with the rate at which his small firm was growing. From then on his brand of self-promotion became integrated seamlessly into the day-to-day operation of his business. “Those of us who have active marketing programs almost do it subconsciously,” he says, in a manner that belies the effort he puts into it.

Kiely’s guerrilla tactics–and the foundation of his advice to new planners–include these: Call the personal finance editor at your local paper; tell him who you are and what you do. “The editor may call you from time to time, throw you a bone, ask you questions, put your name in the paper. Then you cut that out and send it to everybody who you think should know.” Kiely did this with the New Jersey Law Journal, which continues to contact him “when they need a hole to be filled.” He encourages advisors to get involved with local organizations and seek leadership positions. Kiely joined his local CPA society and now chairs its financial planning committee. And be persistent, he says. Regarding the Worth list, he thought, “Gee, it comes out every year and they don’t even know I’m alive,” and decided to change all that. Through a journalist he discovered that even to be considered, the planner must write “a damn good letter” explaining why. Using criteria in financial journalist Mary Rowland’s then recently published book on the practices of the nation’s best advisors, he went down the list, addressing each item, and mailed Worth a six-page letter. It got the magazine’s attention.

Like Kiely, planner Stanasolovich relies on PR, though with the down market he has stepped up his firm’s coordination with reporters and response time to media inquiries, and has expanded his list of media contacts. The mailing list now has some 300 names, to whom he sends his firm’s “financial briefs,” short pieces on a wide range of topics pertaining to a given employee’s areas of expertise. A member of NAPFA, Stanasolovich color-codes communiqu?s from the 750-member fee-only group relating to media (NAPFA’s consumer referral system registered 27,032 inquiries in 2000, up 35% from the previous year), with instructions that they be brought to him for his immediate attention. In fact, he has hired a marketing intern to help make marketing more “automated” in an effort to get away from his reputation that as firm principal, “Lou Stanasolovich does everything.” Legend Financial Advisors has also enhanced its Web site to make it more attractive and useful to existing and prospective clients. Recently a man with $7 million in manageable assets saw Stanasolovich quoted in TheStreet.com. From there he went to the Legend Financial Web site, and then called the firm’s office. The man is now a client.

“We’re being much more proactive, at least this year, anyway,” Stanasolovich says, adding that to date he has participated in more than 90 media interviews. “We’ll try all the not-so-costly stuff,” some of which, especially public relations, has the added benefit of carrying the third-party credibility lacking in other marketing vehicles such as advertising. Planner Mike Knesh agrees, saying PR has the advantage of having somebody else deem he’s an expert so he doesn’t have to pay to claim he’s one himself. “Anyone can buy advertising; not anybody can get quoted.”

Broadcast News

The ultimate goal of an advisor’s marketing effort is to become visible, because visibility equals credibility, maintains Knesh, who as a regular on CNBC’s “Power Lunch,” is visible indeed. “I couldn’t buy that kind of exposure,” he says. He’s also quoted frequently in the Wall Street Journal, Mutual Fund Magazine, and other financial publications. While none of this costs him anything, it does demand time and effort. A former president of his local FPA chapter once asked Knesh why in the world he would want to take a half-day off each month to be on CNBC, since it took a lot of time away from his business. “If that’s the way you perceive it, of course you’re not going to understand the opportunity,” he says. “It surprises me beyond belief how many people would walk away from free publicity because they think of it as a chore or an effort. Well, everything is a chore or effort: The question is, what are the ultimate results you’re going to achieve from it?”

Controlling public relations, and making the most of it, Knesh maintains, is itself a marketing campaign, one in which he is very actively involved. How does an advisor get started? Begin with local community newspapers and radio stations, because they’re always looking for content, he advises. Once your name is in print, it’s easier to get your name in print again. Don’t be discouraged if your quotes are edited out; cultivate relationships with local reporters; keep yourself visible.

And put your media exposure to good use. There’s a television in Knesh’s office waiting room showing videos of Knesh on CNBC. On the coffee table is a book of newspaper and magazine clips. By the time a prospective client meets with Knesh he’s likely convinced that this financial advisor is an expert. When Knesh sits with the client, he doesn’t have to spend much time building credibility. “And instead of building credibility one potential client at a time, I’m building credibility across the board.”

Planner Scott Leonard uses workshops to obtain client referrals, an approach he initiated recently in response to the present market s

ituation. His firm is small–the model of an outsource business–and his time is precious, but he believes the time is right for him and other advisors to tell their tales of asset allocation. His workshops, limited to 10 or 12 persons, are held in a library, more fitting to educational discussions than a restaurant with its attendant distractions, and which he finds too “markety.” He makes it clear to existing clients, whom he has asked to invite a guest, that he isn’t selling anything. Rather, he wants them to understand that they shouldn’t focus solely on investment returns but consider more seriously the reality of risk. “How much risk did you take to get those returns?” he will ask his group. Like Kiely and Knesh, he spends much time talking to the press, speaking at Los Angeles Times investment symposiums and providing input for that paper’s weekly money makeover column.

Strength In Numbers

Having looked into costs required for comprehensive direct mail and professional public relations efforts, Al Coles concludes the numbers are unsupportable for independent planners such as himself–but not if planners band together. “The possibility of cooperative marketing through a public relations channel is one of our few avenues here,” he concludes. He cites as an example the successful co-op program of one of his California clients, 1-800-Dentist. “What you have is the building of a brand around individual dentists that allows them to pool their resources, get marketing, and basically generate an ongoing source of clients.” It’s an approach that has worked well for dentists, freeing them from the clutches of managed care, which is how Coles tends to view the likes of Schwab and Merrill Lynch, with their “big-box solution.”

Coles says he’s talked to a number of firms that have expressed considerable interest in his proposal, and share his vision of the future. “The marketers with these large broker/dealers who have the power and positioning are going to drown out our message unless we can come up with some other way,” he says. (It’s arguable that giant corporate ad campaigns that bring awareness of fee planning to the masses are beneficial to independents as well.) Coles has already put together the “fundamental steps” to realize his project, starting with the hiring of a marketing expert and the “repositioning” of his own firm to take advantage of an ongoing marketing process; he hopes to hold his firm out as a model for other planners to replicate. He is also negotiating with individuals and financial organizations (whose names he felt it premature to divulge) to enlist their aid in establishing a national brand.

Branding is high on NAPFA’s agenda, too, according to NAPFA’s Steve Kanaly. “Branding is one of the number-one topics for our strategic planning committee,” he says, adding that the committee is in “positive agreement on what to do.” Information will be shared with NAPFA regional offices–but not yet with the public–that in mid-July were to start work on branding goals and objectives. “This is the first time our board and strategic committee have really thought strategically, instead of tactically,” he says. He enlisted the aid of an independent industrial psychologist to help “referee” the committee meeting. “After 18 years I think we’ve figured out what we’re not going to do,” says Kanaly. “Branding will help us get focused on everything else.”

In addition to these initiatives, a knowledgeable industry source says that NAPFA is negotiating with The Motley Fool (www.motleyfool.com), an online financial information service, to become the exclusive provider of a financial planner referral service on the Fool site. In addition, Gary Schatsky, former NAPFA chairman and current board member, says NAPFA is looking to build relationships with professional groups including AICPA, AITCO, and AIMR, which bestows the chartered financial designation on those who pass its rigorous exam. He would also like to see NAPFA ally itself with trusts and estates sections of local bar associations.

No one knows whether marketing and brand recognition efforts of independent planners can prevail against a relentless big-money media blitz of banks, wirehouses, and insurers who aim to counsel an advice-hungry nation that independents once claimed as their own. But advisors who haven’t been self-promoting from the get-go seem to agree they had better begin to do “something.” Al Coles, for one, has no idea whether or not his cooperative effort will fly, but he’s determined to find out. “It sounds great, but the devil’s in the details,” he says, “and the only way to know the details is to start.”