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3 Key Systems for a Healthy Independent Advisory Business, Pt. 2: Marketing Overview

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As he celebrates his fifth anniversary of going independent, advisor Mike Patton is writing a series of blogs on what he considers the key points of success when starting and building an independent advisory practice. In the first blog in the series, he provided an overview of the three systems—similar to a circulatory system in the human body, of an advisor’s business. In this, the second blog, he focuses on the role of the advisor’s marketing system.-Ed. 

There may be more articles, books and blogs written on the subject of marketing than on any other single topic. Moreover, it is probably one of the most important topics to the financial advisor. In marketing, there are a variety of approaches. For example, there is “active” or direct marketing. Then you have what I would call indirect marketing. In this post, we’ll discuss marketing as the first of the three systems, similar to a body’s circulatory system, of a healthy financial advisory business. 

The function of marketing is to bring in new clients. I would also call it the “front door” of the business. To begin, I’d like to start from the client’s point of view. Let’s say you are a wealthy individual looking for someone you can trust, who is competent, who will put your interests ahead of their own, who is accessible and who will not try to “sell” you product. How would you know if you actually found this person? 

The short answer is you wouldn’t. Clients must possess just enough trust to hire you. Then, over time, you can develop the rest of the list by proving yourself to them.

There is a lot of clutter out there in “Ad Land.” Advertisers will try anything to get your attention. In what could have been a Yogi Berra muse, “You must get their attention before they will listen.” Bigger, faster, smarter, better—you pick the adjective, but let’s just say that the adjectives common to financial advisory firms are about as worn out as a fifth generation hand-me-down from the local discount store. In other words, everything looks the same to the consumer. So how do you cut through the noise? By doing something different from the norm, that’s how. Here’s a good place to start.

Marketing Step One
What do clients dislike the most about financial advisors? Think about the clients you have gained from other advisors. Why did they leave their former advisor? Were they unresponsive or didn’t seem to listen? Maybe the client felt like their account was being managed in a fashion that didn’t reflect their desires. Perhaps the overconfidence bias of the advisor was a little over-the-top? When you have answered these questions, you are ready to move on. 

Marketing Step Two
If you have lost any clients in the past few years, determine why they left. Answer only if you are sure about the reason. Did the reason match any answers from Step One? 

Notice I didn’t talk about direct mail, referrals, radio ads and so on: we’ll get into that next week in Marketing Part Deux. For now, I would suggest you look inward and reflect on why you got into this business. 

If it is to help as many people as possible gain an edge on their finances, then great. You are on the right track. If it was only to make a lot of money, then I would suggest your derailment lies somewhere ahead. Although there is a strong culture of sales in our business, the focus should be on providing quality advice, not on sales. When you get that, you are truly thinking like a client. 

See you next week!


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