What are the biggest challenges facing financial advisors today? If you're like me, you have either asked yourself one (if not all) of these questions, or you'll soon be taking them into consideration:
- How do I grow my business?
- How do I manage changing technology and make sure my firm has what it needs?
- What's my succession plan?
- What can I do to increase my firm's profitability?
In this, the first in a series of blogs, Greg Friedman on Business Development, I'll address each of these burning questions and offer a few ideas from my own experiences in the industry. First off: let's cover how to build new business, including shifting your focus from relying only on referrals to more aggressive sales and marketing channels.
In My Day…
I'm dating myself, but in the late 1980s, the concept of financial advice was wildly different than it is today. All clients were new clients to the industry, and advisors needed only to rely on referrals for new business. 'Marketing' was a foreign concept outside of answering the phone, and there was no such thing as competition.
How times have changed. Our industry has matured and expanded so quickly over the past five to ten years, with advances in technology, the explosion of social media, mergers and acquisitions and a talented new crop of advisors entering the field. Competition for new business is fierce (potential new clients now interview two to three advisors for the job), margins are shrinking and compliance regulations change often. Add to that an aging industry (on average advisors are in their 50s) and you've got a sea change on the horizon that will determine which firms rise to the challenge and which ones sink to the ocean floor.
So what's an advisor to do to remain successful?
Time to Get Pro-Active
Gone are the days of relying on referrals and waiting for the phone to ring. New clients may stumble on your website (which you should invest in, by the way), but it's critical that you do your homework and pro-actively do some outreach to build new business. Here is a four-step approach that we've implemented in my firm:
Step 1: Focus on marketing efforts and messaging to new clients
Over the past several years we have become much more disciplined and strategic in our marketing efforts and messaging. This included working with a marketing firm to re-develop our website and instituting a coordinated advertising strategy with local magazines.
