Are You Marketing to the Wrong Audience?

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.

Forward-looking advisory firms should try to capture a high earner as early as possible. And as that person grows in earning power, your firm grows with them.

Two Mass Affluent Marketing Strategies

The mass affluent client can be described as:

• Making around $100,000 a year in income.
• Having anywhere between $100,000 to $1 million in investable assets.
• Still accumulating more assets.

Here are two ways to provide these clients what they value: quality, convenience and experience-based interactions:

1. Invest in your digital client experience.

Document your client experience so you can identify which parts can be improved with digital interactions. It may mean that you focus on implementing a remote meeting process or that you use your client portal more heavily to add content they can download. By augmenting your advice with digital interactions, you’ll not only create an experience favored by the mass affluent, you also will increase the efficiency of delivering your advice.

2. Create personalized interactions.

Mass affluent clients want high-quality professional relationships and personalized experiences as well. By investing in your digital experience, create opportunities to personalize meetings, communications, and messages and keep scaling your business.

More important, though, is to identify these clients’ unique needs and offer them educational information that provides real value.

The mass affluent demographic is key to your growth. As more high net worth individuals consolidate around some of the largest RIAs, and then refer their network to those large firms, the average advisor has to identify where the opportunities for growth can be found.

To reach this important group, you need to build your firm’s digital and personalized client service and marketing efforts. By doing that, you position yourself to win with these types of clients in the years ahead.