3 Tips to Grow Your Investment Advisory Practice in 2021

Jan 15, 2021 9:00:00 AM | AET Team

Topics: Trust Platform, Investment Advisors

With a new year, many advisor clients are looking to re-focus on their finances and investment plansLikewise, investment advisors and advisory firms use a new year to initiate new growth and business plans. 

There are numerous strategies an advisor or advisory firm may consider 

As a wise advisor once said regarding prospecting and business development – "everything works and nothing works." In other words, it is better to take an average idea and execute it relentlessly than to take a great idea and implement it half-heartedly. 

Here is a brief look at three ideas an advisor or advisory firms may consider growing their practice in 2021.   

 

Develop a Content / Inbound Marketing Plan 

What seminars were to advisor prospecting in the '90s and into the 21st century, inbound content marketing and social media are quickly becoming to advisory firms of today.  Rather than enticing prospects to listen to an "infomercial" with a nice meal at a chic restaurant, content marketing seeks to attract information seekers to your website. Once there, they can learn more about your firm and philosophy.  Hopefully, they will engage to the point that they join a mailing list or follow a social media platform with your content offerings. 

Content marketing provides a series of contacts or "touches with a prospect to move them along the path from information seeker to new client. 

Even better, digital tools can track visitor interactions with your content and provide information about when it may be optimal for the sales team to reach out and engage the prospect. 

In its purest form, an article is written that will anticipate and address problems your prospects are trying to solve.  When the prospect searches the web, your article aims to show up in the search results.  A simple example would be someone who is nearing retirement and Googling, "how much money do I need to retire?They’ll see a link to your article "How to Know if You Have Enough Money to Retire." The prospect clicks through to your website, and the process has begun. 

In reality, you will need to focus on more specific issues.  Perhaps you are looking to work with anesthesiologists and understand that a critical problem they face is legal liability.  You write an article titled "Anesthesiologists:  Protecting Your Investment Assets from Lawsuits." 

 While effective, this is not as simple as it may sound. The challenge of implementing such a campaign lies in creating content that is both educational and engaging. Search engine optimization (SEO) tactics go well beyond a title focused on keywords, and fierce internet competition centers around popular keywords. This is especially true of the investment world.  Worse still for advisors, compliance restrictions and disclaimers can make it challenging to meet the engaging standard with content. 

Established firms may devote the financial resources necessary to hire a digital marketing agency, but such an engagement won't come cheap.  New firms or younger advisors who may have the time but not the financial resources might choose to roll up their sleeves and implement a do-it-yourself strategy.  

An excellent place for an advisor to start is HubSpotcademy.com.  HubSpot is a digital marketing and SEO giant. They created the academy to provide free education and courses that allow anyone to learn content marketing basics. 

 

Re-Engage With the Lower Part of Your Book 

We mentioned earlier that there are no secret treasure maps when it comes to business developmentWorking through the bottom part of your client book (or a partnership where a younger advisor works through an older advisor's book) is a tactic that is old as the industry itselfUsually, the biggest obstacle preventing an advisor from reaching out to these clients is psychological.  After all, the bottom part of your book got there for a reasonAs the clients are generating little or no business, advisor engagement falls offA feedback loop kicks in where the less you talk with a client, the less likely you will speak with them in the future. But things change. 

 Markets changeFamilies changeJobs changeLaws ChangeYou get the idea. 

In the old days, a wirehouse broker might attempt to re-engage with a product campaign such as a high-yielding new issue of preferred stock or a structured product such as a unit investment trustIn today's world, such campaigns should center around financial and investment planning.  A firm investment in a new financial planning platform is a great reason for an advisor to reach outOther triggers might be a change in Washington.  Last year's CARE Act is a perfect example.  With an incoming new administration, there will surely be opportunities to discuss how changes will affect the investment and tax landscape. 

While an obvious target is potential 401(k) rollovers, even clients themselves can be surprised with inheritances or receive lawsuit settlements Family changes introduce several complex and delicate issues to address. 

Unfortunately, a newer firm or advisor may not have an old and big enough book to "work." Internally, this may provide an opportunity to partner a younger advisor with a more senior advisor who otherwise isn't going to go down this road. 

From an external perspective, there may be an opportunity to acquire another firm whose owner is approaching retirement and looking for an exit plan.   Numerous websites and exchanges list advisory practices for sale.   

While the industry is rife with advisors approaching retirement, potential buyers would be well advised to note industry commentator Michael Kitces who observes that firms may be better off finding acquisition targets from their natural market and relationships. 

 

Develop a Niche  

Many advisors have found great success in developing a service niche.   This is a fantastic way for advisors to add value in a world where the increasing popularity of passive index investing gives pause for many clients regarding advisor fees.  A niche also separates an advisor from their peers. 

Niches can be developed around nearly any interest or group but most often focus on a specific occupation, such as the anesthesiologist we discussed earlier or employees of one particular company.  Many companies will have a unique benefit and stock plan that an advisor can become an expert on and work with employees when they leave the company.  While tech company startups may be a possibility, don't overlook what appear to be more mundane companies.  It has been said that UPS created more millionaires than Microsoft ever did.  Whether or not that is factually correct, many advisors have done quite well servicing UPS executives and their company stock. 

Interestingly enough, developing a niche provides an opportunity for younger advisors to engage with centers of influence and network with professionals who might not otherwise give them the time of day.  Researching potential niches presents an advisor the chance to reach out to these individuals and ask for their advice.  An approach might sound like - "I am thinking of focusing on serving potential clients in the XYZ industry, I was hoping I could pick your brain about certain things I should consider as well as the particular issues common to the profession." Many older statesmen and women love to advise younger professionals. They are impressed with the initiative shown by someone taking such steps. You are demonstrating that you are a dedicated professional working hard to improve your craft.  While they may not be ready to hand you their life savings to manage just yet, they can serve as a long-term resource and advocate.   

Financial advisor coach James Pollard has a useful article about choosing a niche on his blog. 

 

Chaos and Opportunity 

2020 was undoubtedly a year for the record books.  Interestingly chaotic times often bring about significant business opportunities for investment advisors.  While markets have been raging since the March low, there is still a great deal of fear and anxiety among the general public. Unfortunately, such concerns may very well persist well throughout 2021. Don't let such worries paralyze your business growth efforts, and remember these are the times to show what value you and your investment advisory firm bring to the table. 

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