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Mining for prospects: 5 popular techniques used by advisors

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From telemarketing and networking with retirees to cold calling and TV advertising, life insurance and financial service sales professionals are using a host of methods to reach prospects.

By far the most popular of the techniques is also the most effective: Nearly 9 in 10 of the respondents in our “2014 Advisor Survey” secure introductions to prospects through referrals. The percentage of users for other prospecting methods drops off significantly thereafter.

Of the various other techniques identified in the research, none is employed by more than half of the survey respondents. Of the top eight techniques, the adoption rate in most cases ranges between the high single digits and 20 percent. What follows is a review of the five most popular prospecting methods used by advisors.

Happy reading! 

Referral marketing: a favored method of advisors

Referrals are by far financial service professionals’ most common source of leads to prospective clients. Nearly 9 in 10 (87.29 percent) of the respondents in our Advisor Survey prospect depend on referrals.

For many, however, the problem is getting these qualified prospects: Advisors all too often are ineffective when eliciting from existing clients names of people to whom the client can offer an introduction.

Sometimes, the approach is too aggressive, as when the advisors makes the client feel obliged to provide names of friends and acquaintances, the referrals deemed by the advisor as a form of compensation. Or the advisor may fail to overcome client concerns, such as whether the advisor can be counted on to use the referral appropriately — and not generate blowback from an angry prospect.

How one asks for referral is key. Using such phrases as “I’ve never met anyone I couldn’t help” or “I would love the opportunity to help the people you care about,” can lend the request more positive tone. Also constructive is to ease a client’s concerns by describing how one would approach referrals.

If the client proves amenable, the next step is to make the request specific (e.g., by assisting the client in identifying good referral prospects; or by independently identifying targeted prospects, then asking the client for a referral). 

Partnering with other professionals

With tax season now in full swing, you may well be looking for opportunities to convert clients’ and prospects’ heightened awareness of current or potential tax liabilities to solutions that will help them attain their financial goals.

You’re not alone. Nearly half (44.92 percent) of the advisors surveyed for this report generate leads to by partnering with other professionals — notably certified public accountants and estate planning attorneys — who can assist in formulating tax-avoidance strategies for high net worth clients.

Many of them, too, are goldmines for leads to client prospects. These alliances run from the informal (e.g., ad-hoc exchanging of leads to clients in need of insurance and financial planning services) to the formal, wherein each advisor’s contribution to the partnership is specifically delineated.

Beyond securing leads and participating in co-marketing arrangements (such as joint-seminars), financial advisors can leverage a CPA’s or estate planning attorney’s expertise to identify gaps in planning.

CPA might uncover, for example, the need to adjust a client’s financial objectives or cash position because he or she is no longer employed; or because a business’s holdings of stocks and other assets are not advantageous from a tax perspective. Likewise, an estate planning attorney might flag the desirability of implementing an irrevocable life insurance trust (ILIT), distributions from which are estate tax-free.

Direct mail: Still relevant in the digital age

 For many digital-savvy advisors, particularly those younger than forty, direct mail marketing of products seems like an outmoded way to prospect for clients. Or so it would appear until you consider these facts:

(1)    At a time when e-mail in-boxes and social media feeds are overflowing with unsolicited messages, a well-crafted direct mail piece can distinguish you from the competition; and

(2)    Many older, affluent boomers who are key prospect for a retirement plan, business exit plan or annuity sale still rely heavily on snail mail for personal or business communications.

These facts are not lost on the more than one in five advisors (21.19 percent) polled in our survey who use direct mail to promote their products. To be effective, however, financial service professionals need to follow certain best practices, to wit:

(1)   Like the direct mail piece itself, the prospect list for a direct mail campaign should be custom-built. Taking a shot-gun approach to direct mail won’t be effective if the mailing’s recipients don’t fit the advisor’s target client profile.

(2)   Direct mailing should be personal and engaging. Eye-catching envelopes, customized teasers and hand-written notes all indicate the advisor is taking care to elicit the reader’s interest.

(3)   The direct mailer should offer recipients incentives to respond to the advisor’s invitation. These may include, for example, a discount on services, bonus gift or free trial of an e-newsletter.

Seminar marketing: Still a popular tool

 Direct mail literature to promote planning seminars continue to be a popular prospecting tool for many advisors. Nearly one in five of financial professionals in our Advisor Survey (17.8 percent) use seminars to reach client prospects.

Not all of them do so successfully. Too often, advisors turn to time-worn topics: “Reduce your tax burden,” “Achieve high returns on low-risk investments,” or “Secure a guaranteed income for life.” Add in a meal for attendees and the result can be a big expense with little to show for it.

Qualified prospects can be secured from such events by carefully selecting timely topics that are likely to appeal to the target audience. When marketing direct mail pieces to seniors, for example, consider focusing on the uncertain future of Social Security or best practices when undertaking long-term care planning.

Having enticed prospects to come to an event, the next hurdle to surmount is securing appointments with participants. To that end, you need to have people and processes in place to gauge attendees’ interest in having a one-on-one meeting to discuss financial goals in relation to the topic. You also need to hold advisory team members accountable when seminars objectives are not met. 

Taking your message to the airwaves

To raise brand-awareness for your practice, what could be better than to promote your expertise through AM or FM radio to hundreds or even thousands of prospects in your metro area?

Despite the potentially huge marketing benefits, comparatively few advisors resort to the airwaves: Just 9.32 percent — less than 1 in 10 — of our survey respondents market themselves through radio advertising.

A common disincentive is the expense: To buy air time for a slick ad could cost a very substantial sum, a big part of it attributable to production costs.

But radio advertising isn’t the only over-the-airwaves way to get word the out. For many, the better option is a radio call-in program where the advisor provides listeners with free on-air advice—and promotes their services in the bargain.

But as with other forms of marketing, a well-designed program is critical. To ensure a large audience, for example, consider offering listeners a gift, such as a free white paper on retirement planning posted on your web site. As many radio listeners now also are mobile, you’ll want to avail them of convenient methods for accessing your program (e.g., a downloadable podcast or app for accessing the content via a smartphone).  

Not least, provide a seamless transition for radio listeners to other elements of your marketing program. If you’re offering a white paper on your web portal, the page to which participants are invited to click should thank them for tuning in.


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