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While it’s been said time and time again that advisors have a long way to go before they can be dubbed stellar marketers, let’s hold off on etching that mantra in stone. A good number of advisors are indeed making strides in perfecting their marketing techniques to help them stand out from their competition and attract new business–either by using their own out-of-the-box strategies like starting community service programs and getting referrals from other advisors and professionals like accountants or estate planning attorneys, or by sticking with the tried-and-true methods like client referrals and building attractive Web sites. An increasing number of advisors realize that they need to clearly define themselves to potential clients and the overall market, or their competitors will do that job for them.

Many advisors still rely on referrals to bring in a sizable portion of their new business. According to Rydex AdvisorBenchmarking’s 2006 survey of the RIA business, The RIA Industry: The Momentum Continues, 97% of the 600 advisors who provided data for the study said client referrals continued to be their most common marketing method. Seventy percent of the advisors polled engage in professional referral agreements, and 70% also rely on their firms’ Web sites to drum up new business. In addition, the study found that 6% of advisors’ total budgets were spent on marketing and advertising in 2005, a slight jump from the 4% they allocated to marketing in 2004.

David Welling, VP of marketing and strategic programs at Schwab Institutional, would argue that “the foundational building block of any good marketing and business development strategy has to start with referrals.” Schwab’s research of about 1,400 affiliated advisory firms over the past six months shows that while 75% to 80% of an advisor’s new business comes from referrals from clients or intermediaries, “some advisors get 5% growth a year [in assets under management] from that, others get 40% growth. Advisors are already pretty good at getting referrals from their clients, but there are ways to be great.” Welling says that in Schwab’s work with advisors, it encourages them to have an active referral strategy, though he hastens to point out that “Active doesn’t necessarily have to mean sales-y or harassing your clients,” but you should have a “disciplined process around how are you sourcing business from your clients.”

Welling says it’s also important for advisors to benchmark themselves against their peers in terms of size and style of firm. To that end, beginning in August Schwab will conduct an online advisor benchmarking study. Advisor clients can input their firm’s data and by late September or October “get a peer benchmarking report delivered back to them online.” Then, they can use additional analytical tools delivered under Schwab’s practice management and business development GrowthPoint program “that will allow them to slice and dice and compare” their numbers with their peers.

A Disciplined Referral Process

Bert Whitehead, president of fee-only Cambridge Connection in Franklin, Michigan, has a “disciplined process” of building and solidifying referrals through a program Cambridge dubs the “Relationship Bonding Experience.” When a new client signs up, “we invite the client to dinner at a very nice restaurant and invite the client who referred them to join us,” he says. “It is a thank you to the old client and a welcome to the new client.” During the dinner, Whitehead asks the new client about his experience in hiring Cambridge, asking questions like: “What did his friend say that was most compelling? Why did he pick us over other advisors? What did he find to be the most or least helpful experience in working with us?”

Whitehead says the dinners allow him to “get to know our clients better, and learn what works in our system and what doesn’t.” Plus, “spending $200 to 400 for each client recruited (or about 2%-4% of the first year’s fees) to encourage more referrals and train new clients on how to refer clients is the most cost-effective system I have ever seen.” Whitehead says his firm grows 15% to 20% per year through client referrals–which is the biggest percentage of growth his firm can manage. His firm doesn’t advertise, pay for referrals from any custodial referral programs, or conduct seminars, and spends a “very small amount of time” on marketing and devotes very little money to it. Ninety percent of his firm’s clients come from client referrals, with the other 10% hailing from NAPFA referrals and people who’ve read about him in the press. The secret to Cambridge’s referral success is recognizing that “clients are our sales force,” Whitehead says. “We mention referrals during every [client] meeting, thanking them for recent referrals, or telling them about the new Cambridge Financial Review (CFR), which provides a two-hour focused appointment for those interested in being clients.”

It’s All About the Relationship

Steve Sanduski, managing partner of PEAK, a financial advisor coaching and consulting firm based in Omaha, Nebraska, (, argues that marketing is indeed all about relationships. He and PEAK President Ron Carson, who is an advisor himself, wrote a book on advisor marketing, Tested in the Trenches, (Kaplan Business, 2005). Sanduski recommends that advisors build deep relationships with a relatively small number of clients, around 150, and provide great service to that manageable number of people. If, as he would expect, the business grows beyond that 150 number, add an associate advisor, raise the principal advisor’s minimum asset level, and turn over smaller or less complicated relationships to the associate advisor.

Sanduski encourages advisors to work with people with whom they share common interests or passions, whether it’s cooking, theater, golf, or the arts, and find creative ways to share those interests in memorable ways: “Give clients access to something they couldn’t get on their own.” For instance, if there’s a new art exhibit in town, “contact the museum and see if you can arrange a special showing for 15 or 20 people,” Sanduski explains. Clients associate those memorable moments with the advisor, and it deepens the relationship. If you know something about wine, hold a high-end wine tasting in a private room at a local restaurant for eight to 10 people, with the restaurant’s wine wholesaler or a local wine store’s expert walking the group through the tasting. Encourage clients to bring friends to these events, and those friends may develop into new clients.

The Niche Approach

Advisor Stacy Francis connects with her women clients by holding special networking and educational events in New York through a non-profit she started a couple years ago called Savvy Ladies ( Savvy Ladies is designed to “educate and empower women about financial issues,” she says, because she found that the financial services industry was not providing women with a place where the not only “feel comfortable and learn in an unbiased environment” but also aren’t being “sold something.” Francis, president of Francis Financial in New York, provides cocktails, hors d’oeuvres, and networking time at the more than 30 seminars and workshops she holds throughout the year. “It turns out to be a fun girls’ night out on the town.” Topics range from how to live large on less in New York City, she says, to how to own a home, to getting over the budgeting blues. “We cover all areas of finance,” she says, and it’s a great place for women of all ages to network. Some of the women “are true millionaires and some are just getting off of welfare,” Francis says, but “it’s wonderful because the thing that binds them all is that they want to become financially free.”

A recent study by Forrester Research in Cambridge, Massachusetts, in which consumers rated their insurance companies, broker/dealers, and banks, found that “there is a strong correlation between customer advocacy and future purchase intent.” Forrester defined customer advocacy as: “The perception that the firm does what’s best for customers, not just what’s best for its own bottom line.” The study, “Customer Advocacy: The Secret to Loyal Financial Services Customers”, cites four characteristics of customer advocacy: “simplicity, benevolence, transparency, and trustworthiness.” Customer advocacy “absolutely does apply” to advisors individually, and advisors who incorporate these advocacy attributes into their practices should stand out from the crowd, argues Bill Doyle, the Forrester analyst who authored the study. “Simplify your customer’s life,” he says.

That’s certainly what Francis believes she’s doing through Savvy Ladies, and her community service is not only helping women in the community–who may or may not become her clients–it’s also giving “credibility” to her planning practice, Francis Financial, which she started two and a half years ago. Savvy Ladies has been “more beneficial to us in making inroads with wealthy clients,” she says. “I now have a waiting list of clients that we’re trying to find time to work with. I attribute a lot of this growth to Savvy Ladies.” Francis’s firm has $7 million in assets under management and is adding about $1 million per month in new client assets. “I was told when I started my firm that it would take about five years to really pick up steam and turn a profit, but we’ve been able to do that much sooner.”

Paul Sanchez is also of the mind that the less affluent need planning advice, so he and his partner left the big planning firm Sullivan, Bruyette, Speros & Blayney to launch their own practice, Sanchez & Zures LLC in McLean, Virginia. While at Sullivan, Bruyette, Sanchez saw the firm grow to 40 employees with $1 billion under management. But the firm decided that all new clients must have at least $1 million of liquid assets. “Over time, a lot of leads were being turned away because they didn’t meet that [minimum], so my partner and I saw people needing help.” Sanchez and his partner struck out on their own to serve clients who may have only $100,000 and need a couple hours of financial planning guidance. To find such clients, in March Sanchez started identifying other firms in the Northern Virginia, Maryland, and Washington, D.C. areas that have high minimums–$500,000 or $1 million–and “telling them we’d like to be a reliable referral source for those clients they don’t want to do business with.” So far, he’s gotten six referrals. “Most [planning firms] are very open about giving us referrals,” Sanchez says, because “they want to send leads within the fee-based world.”

The B/D Model

Independent broker/dealers also provide marketing support to their representatives, though the range of services offered varies. At Mutual Service Corp., the B/D based in West Palm Beach, Florida, that has about 1,400 reps, VP of Marketing David Campanelli says that MSC advisors aren’t so much interested in how to get clients (they tend to have plenty, he says) as they are in looking to the broker/dealer “to solve my practice management problems, to help me build my business” by becoming “more efficient technically, by running a better shop, by teaching me to hire the right staff.” Campanelli says it’s important for advisors to understand their client mix, to “segment their client base between A, B, and C clients,” and then “capitalize on the clients you have and the clients you want to work with.” Those clients might not always be the ones with the most assets to manage, Campanelli points out, rather, it could mean finding the “kind of people you enjoy working with. Find them, identify them, and clone them. But you can’t do that if 80% of your time is spent with B and C clients.” MSC has also run a year-long internal coaching program for four years, called System for Success. This year, says Campanelli, the program will focus on four disciplines: client management, including how to segment your client base; technology, under which an advisor’s systems will be inspected to “make sure your systems are in sync with each other and with us,” and to help in going paperless; hiring and firing and compensating staff; and personal branding. MSC will also provide discounted access to practice management and marketing consultants like Duncan McPherson, Mark Tibergien, and Peter Montoya.

One MSC advisor who’s taken a highly professional, integrated approach to branding is Steve Robbins of Steve Robbins, Inc. in Florissant, Missouri, who has 500 mostly middle-class clients. Even the name of his firm is part of his branding approach. “I fought hard” against changing the firm’s name, Robbins jokingly says (a story confirmed by his firm’s director of business development, Lisa Avenevoli), but branding expert Montoya convinced him that it would be a differentiator, so he changed the name from Invest One Capital Management.

The integrated marketing approach includes a new office building, which Robbins says is in an historic district in Florissant and looks like a New Orleans mansion. Its design and color is a reflection of the corporate brand as displayed in the stylized flower logo of the firm. The tag line, Financial Planning for a Flourishing Retirement, plays on the local angle–”Florissant” means flowering in French–and on Robbins’s niche market–retirees and pre-retirees. The office is situated on Florissant’s main street and is meant to be “inviting,” to clients; Avenevoli says clients often will stop in to say hello to the staff. Robbins says he could have opened an office in St. Louis proper, but many retirees are not comfortable with the one-way streets, tall buildings, and difficulty parking that such a downtown location entails, he argues. “This is a homey feel,” he says. “That’s part of our branding.”

Throwing a Party

Another popular marketing strategy is to bring clients and prospects together for either educational seminars or a social outing. Schwab’s Welling says he’s participated in 300 to 400 clients events over the past 18 months, and that it’s important for advisors to “think about the strategy of the event,” determine their “primary objective for the event, who’s going to be there, how do you get them there, what’s the follow up strategy afterwards, and try to figure out the right mix of content, depending on whether there are prospects there or clients, or a mix.”

Robbins uses both the seminar and social event approach. He still gets clients through referrals and the seminar approach that got him started in the business; but now the seminars are held in a 1,000 sq. ft. classroom in his building called the “banquet room.” In addition to the help he got from Montoya in first identifying his niche so he could build such an integrated marketing strategy, Robbins credits Bill Good of Bill Good Marketing with helping him develop his “retirement party” strategy. Once a year, the firm throws a lavish retirement party for an individual client who has substantial retirement assets and is nearing retirement. Avenevoli and the staff will work with the soon-to-be retired person’s spouse to invite 60 to 100 people for a sit-down dinner. A professional comedian is hired to act as MC for the event, and Avenevoli puts together a slide show of the honoree to be shown at the party. The firm sends out the invitations and follows up with the attendees to collect any anecdotes about the honoree, “so we have maybe half a dozen contacts with the attendees before we even meet them,” notes Robbins. Avenevoli stresses that no marketing is done at the event, so while the staff attends, no business cards are handed out and there are no “Sponsored by . . .” placards. Afterward, and only with the permission of the spouse, the guests are contacted and asked if they want to get onto Robbins’s mailing list.

Robbins’s branding and client acquisition approach is a good example of combining the experts’ suggestions with the knowledge you have of your best clients to grow your business and differentiate yourself. Taking a look at what your peers are doing when it comes to marketing–or any practice management tactic–is perhaps the best way for advisors to pick up strategic ideas that may work well for them.

Washington Bureau Chief Melanie Waddell can be reached at [email protected].


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