Blogger and XY Planning Network co-founder Michael Kitces.
In a recent interview with ThinkAdvisor, investment manager Ken Fisher dished on why Fisher Investments has such a "robust" advertising and marketing budget. The firm targets ad spending equal to about 6% of yearly revenue — for an advisor bringing in $1 million, that would mean roughly $60,000.
Popular blogger and planner Michael Kitces took to Twitter to share his views on advisor marketing — the average firm spends less than 2% of revenue on sales, he says — spurring a dialogue on advisor marketing.
The Twitter thread focused on two related issues: Why Fisher spends so much, and whether there is value to be gained by following his lead.
To the first question, Kitces quipped: "I can think of $114B reasons…", referring to Fisher Investments' current level of assets.
Fisher Investments has $114B AUM, and spends 6% of revenue on marketing and advertising. (Average advisory firm is <2%)
WHY does Fisher spend 6% of revenue on marketing and advertising? I can think of $114B reasons…
"Why Ken Fisher Advertises So Much" https://t.co/X0XPVawCs9
— MichaelKitces (@MichaelKitces) September 28, 2019
RIA consultant Brad Wales then probed: "Curious, what's your take on what's driving the low <2% average? Lack of desire to actually spend the money? Lack of familiarity/comfort with how to prudently spend it? Both? Or perhaps something else?"
Kitces answered: "Inability to figure out how to deploy it effectively. If your ROI on marketing was near-0%, you wouldn't spend much, either. :) Believe most of that 2% is client appreciation events and things that are still only even quasi-marketing."
Andres Garcia, CFA, of Zoe Financial chimed in: "The industry has been outbound sales driven. Senior folks at large RIAs grew up in that world and thus don't really buy into marketing driving their biz. I found 6% of Rev to be surprisingly low for Fisher."
Kitces replied: "Yeah I suspect it was actually higher for Fisher in the past. Marketing is one of the few areas in advisory firms that has real economies of scale. 6% of Fisher revenue is still an AMAZINGLY large marketing spend for an RIA. :)" replied Kitces.
