The leaders of wealth management firms have a complex marketing and recruiting task: attracting talented financial advisors to the practice while also sending the right message to a diverse investing public.
It’s a task that Louis Diamond and April Rudin know well in their respective roles as the president of Diamond Consultants and the CEO of the Rudin Group. Though the former’s firm is more focused on advisor recruiting and the latter’s on marketing consulting, both have a wealth of practical knowledge regarding the best ways advisory firms can stand out from the crowd.
The duo shared some of their best tips and strategies during a recent ThinkAdvisor webcast (available for replay here), starting from the premise that effective marketing requires a genuine strategy and a commitment of effort and resources. It can’t be an afterthought or something left to an inexperienced intern.
The same is true for effective recruiting strategies, and in some ways, the same type of messaging and information that attracts a client to work with a wealth management firm will also be effective in attracting talented advisors to the team. Firms need to showcase both their culture and their capabilities, the experts emphasized, particularly when it comes to winning advisors who seek to serve affluent investors.
Simply put, the financial lives of clients at all wealth levels have increased in complexity over time, and that requires advisors to bring more advanced solutions and services to the table — everything from access to private market investments and innovative estate planning techniques to support with charitable giving and the transition to retirement. Effective marketing and recruiting materials will tell the story of a firm's ability to deliver on all this and more.
In both Rudin’s and Diamond’s view, the great wealth transfer represents both a big opportunity and a potential challenge for advisors hoping to grow their businesses in the decade ahead. With the right footing, firms can continue to serve their existing clients while developing deeper relationships with the next generation of investors and advisor talent.
Appealing to Younger Clients
As Rudin and Diamond observed, a complementary trend to the great wealth transfer driving money from the silent generation and baby boomers toward Gen X and millennials is the fact that wealth is being generated by many Americans at younger ages.
It’s a fact that is generating greater demand for financial advice, the duo agreed. However, industry research shows the average age of financial advisors is now in the realm of 57 years old. Building an attractive brand is more important than ever, according to Rudin and Diamond, and that applies across the spectrum of firm sizes and styles.
For the big, established wirehouses and investment banks, it may be a challenge for the brand to remain fresh and relevant. In such cases, the spotlighting of new platform features and client service initiatives can make a lot of sense in both public-facing and recruiting-oriented marketing materials.
For smaller organizations like independent registered investment advisors, the weightiness of a historically important brand obviously can’t be relied upon. This is where more personal branding can come in, according to Rudin, with advisors taking advantage of venues such as LinkedIn to establish an open and engaging presence online that demonstrates what the organization is all about.
Both Clients and Advisors Have More Demands
According to Rudin and Diamond, there’s no doubt that today’s wealth management clients are seeking more comprehensive and interconnected services from their financial advisors. Long gone are the days where providing stock picks and striving to deliver “portfolio alpha” were at the center of the advisor-client-firm relationship.
As such, successful firms are making a concerted effort to expand their suit of services for clients and to provide more robust and efficient platforms for their advisors. As Rudin said, it’s “almost like family office style services for everyone — where you have an integrated investment and financial plan for all aspects of the clients’ financial lives.”
But it’s also important to realize that no single firm, even the biggest and best-resourced organizations in the wealth management business, can do everything in house in a best-in-class fashion. So, it’s important for the branding and the recruiting strategy to be clear about the firm’s niche and specialties, as well as its ability to connect its advisors and clients to third-party resources when necessary.
“The value of financial advice is changing,” Rudin said. “Your ability to package up all of these different services and then differentiate yourself as that coordinator or quarterback is paramount.”
Advisors and Clients Alike Want Choice and Flexibility
Diamond emphasized the fact that many advisors may be eager to move firms, but that doesn’t mean they like the idea of constant disruption. The same is true for clients; they may feel dissatisfied with their current advisor and be willing to move on, but that doesn’t mean they want to change advisors on a regular basis.
So, it’s important for firms to provide flexibility in terms of their service offerings and advisor affiliation styles — allowing both advisors and clients to evolve how they interact with the firm as circumstances change. Obviously, marketing and recruiting materials need to reflect this fact, too.
“Everyone likes choice, and no one likes the idea of transitioning again,” Diamond said. “Advisors like to know that, if their business needs change, they have ways to throttle up or throttle down the relationship with the firm, so to speak.”
Another related consideration on the mind of both advisors and clients is the topic of succession planning. Especially for those advisors who are advanced in their careers, Diamond said, they like to know that they’ll have an off-ramp at their new firm — one that will help ensure clients and colleagues are taken care of.
Where to Focus Marketing Resources
When it comes to the right venue for making their presence felt, Rudin and Diamond agreed, advisors should think about it as they would think about allocating a client portfolio. That is, diversification matters, but so does taking advantage of targeted opportunities that suit one’s bigger objectives.
“It’s very important to think strategically about the marketing mix that the firm wants to use,” Rudin said. “Beyond setting the right-sized budget, venue matters a lot as well, depending on the specific audiences you’re trying to reach.”
As an example, Rudin pointed to the fact that Facebook is a very popular venue for retirees — particularly retired teachers and public-sector workers seeking to remain connected to former colleagues or affinity groups. So, an advisor specializing in supporting retirees should consider deploying their marketing materials accordingly.
Alternatively, a venue like LinkedIn can help one connect to entrepreneurs and career professionals in any number of high-growth industries. Advisors also frequent the platform, so materials published there could potentially be tailored to attract both audiences.
Regardless of the venue, Rudin and Diamond warned, advisors must avoid taking a cookie-cutter approach. Rather than sharing bland advertisements about their service capabilities, for example, they may want to prioritize sharing high-impact thought leadership pieces or even more personal materials that can help the advisors create a unique digital presence.
Pictured: Louis Diamond and April Rudin
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