After growth-oriented advisors master getting referrals from existing clients, they expand their outbound marketing efforts. In doing so, the natural action to take is to invest more in marketing — specifically digital efforts — to reach more people.
The average advisory firm spends only 1%-2% of their annual revenues on marketing. But even with a small amount invested in marketing efforts, we’ve seen many advisors throw that money away.
Why? Because they’re using it to target the wrong audience.
While most advisors are focused on attracting high-net-worth clients and serving ever-richer investors, the bigger opportunity is found elsewhere.
Targeting the Mass Affluent
Mass affluent clients now should be the primary focus of advisors who want to grow their companies over the next several decades. There are many reasons why this is the smart move, but here are some of the most compelling:
According to MarketResearch.com, “Affluent consumers account for 28% of all U.S. adults. The 34 million mass affluent consumers represent 15% of all American consumers, while the highly affluent account for 9% and the super-affluent segment amounts to 4% of American adults.”
Playing the numbers game, the mass affluent population features far more people who need financial advice and can be possible clients.
Mass affluent individuals might make up 15% of consumers, but they hold a much higher share of the possible investable wealth — which is what most advisors who want to immediately grow their AUM care about most. In fact, the mass affluent hold 43% of all investable assets.
Advisors may think of mass affluent as the HENRY (High Earner, Not Rich Yet) population, but the numbers above clearly show there is immediate wealth that needs advice.