High-Growth Advisors Go All-In on Marketing: Broadridge

Customer acquisition rates vary widely among financial advisors, but “smart marketing” pays off, and those advisors who consider themselves to be “innovators” in leveraging technology are “reaping bottom-line benefits,” according to the findings of a survey conducted for fintech firm Broadridge Financial Solutions.

The study, conducted in May by Boston Research Technologies, defined “growth-focused advisors” as those aged 25 to 49 who spent more than $5,000 on marketing annually and self-identified as “aggressively focused on adding new clients.” Twenty-one percent of the 406 U.S. advisors surveyed were part of this group.

Growth-focused advisors averaged nearly twice the assets under management of their peers, at $297 million vs. just $154 million, according to the report. Forty-three percent of growth-focused advisors, meanwhile, were able to successfully acquire 20 or more clients over the past year, compared with only 16% for other advisors, Broadridge said.

“We’re seeing a planned strategic investment in digital marketing among aggressive, growth-oriented advisors and firms,” Kevin Darlington, vice president of Advisor Solutions at Broadridge, said Wednesday in a statement. “Advisors are already investing in and seeing success in organic social media marketing,” he said, adding: “As it becomes increasingly difficult to break through the organic clutter, the natural next step is increased investment in paid digital advertising channels that can offer powerful targeting to new audiences and stoke the lead generation pipeline.”

The most growth-minded advisors are “separating themselves from the pack in terms of new client acquisition rates,” which he said were “even more than we suspected.”

The most innovative, growth-focused advisors that were surveyed are “using digital channels to their advantage, growing a healthy inbound prospect pipeline and closing leads,” he said, adding, however, that “too many advisors still need to secure the building blocks of their digital prospecting journey before savvier advisors swoop in first.”

Initiatives including the optimization of websites to generate traffic from the right prospects and making it easy for those prospects to opt into future advisor communication “have never been more important to business success,” he said.

Growth-focused advisors were more likely to achieve a higher level of AUM, spend more on marketing per acquisition, gauge marketing effectiveness in terms of revenue and be confident in their ability to meet their business goals, according to Broadridge.

Annual marketing spend among respondents largely corresponded with client AUM, with 55% of those with under $200 million under management spending under $2,500 and 70% of those with over $200 million in AUM spending more than $10,000, the company said.

Across all respondents, the average percentage of revenue spent on annual marketing was just 3.3%, and marketing spend was found to be more focused on new client acquisition (60% of respondents) than cross-selling of existing clients and family members (40% of them), according to the firm.