A Defined Marketing Strategy Is Key to Growth for Advisors: Broadridge

Myriad challenges continue to pressure registered investment advisors and independent broker-dealers to find innovative new solutions to generate business. Among them, according to research released Wednesday by Broadridge Financial Solutions, are market volatility, increasing compliance and regulatory pressures, and a competitive landscape for wealth management service professionals.

Sixty-three percent of participants in Broadridge's annual financial advisor marketing survey reported that they are actively seeking new clients, but only 43% said they are experiencing increases in inbound prospect requests.

"Despite evidence that staying on offense with a sharp marketing strategy yields business growth, especially in volatile markets, we've seen advisors shift back to defense and fail to allocate the right level of time, money and effort to their marketing strategies," Kevin Darlington, head of Broadridge Advisor Solutions, said in a statement.

"That said, digital media usage is a bright spot and continues to show upward-trending success, as advisors double down on digital strategies and maximize the use of websites, LinkedIn and Facebook to generate leads."

Broadridge conducted a quantitative, online survey between Sept. 29 and Oct. 10 among 401 financial advisors.

Defined Marketing Strategy Boosts Results

The survey found that although advisors' average marketing spend increased to $17,433 in 2022, up from $16,090 in 2021, the percentage of revenue allocated to marketing was down to an average of 3.1%, compared with 3.6% last year.

In addition, only 10% of advisors said they were very satisfied with their marketing return on investment, down from 15% in 2021. RIAs tend to allocate more to marketing, spending $27,000 annually, while IBDs spend $9,700, according to Broadridge.

Despite an increase in marketing dollars spent, only 28% of advisors have a defined marketing strategy — up two percentage points from the survey's 2021 findings. And although they are in the minority, these advisors are far likelier to achieve better business outcomes than their counterparts without a defined marketing strategy.

Seventy-six percent of advisors with a defined marketing strategy said they feel somewhat or very confident in meeting practice growth goals, versus 61% among those without a strategy. Not only that, advisors with a defined marketing strategy have onboarded more than two times the number of new clients in the past 12 months — an average of 41 new clients versus 17 for those without a defined marketing strategy.

Eighty-two percent of advisors reported that developing a marketing plan/strategy is the top challenge when it comes to marketing activities, followed by 81% who cited finding the time for marketing efforts and 79% who said the biggest hurdle is managing compliance.

New Clients via Social Media

Advisors' success in converting social media leads to clients is trending up, according to the survey; rising to 41% in 2022, up from 34% in 2019. Fifty-seven percent of RIAs and IBDs with a defined marketing strategy converted a social media lead to a new client over that period, compared with 36% of those without a strategy.

Sixty-one percent of advisors said their websites could be more effective in generating leads. However, 31% reported that they plan to spend more on their websites in the year ahead, the highest spending allocation among all areas reported, according to Broadridge.

Advisors' other top tactics include using digital marketing to expand their prospect pools. Twenty-seven percent said they currently service non-local clients, up from 24% last year.

Forty-three percent of advisors under age 45 said they plan to take advantage of the Securities and Exchange Commission's new marketing rule, leaning into the idea of featuring testimonials in their marketing. This is compared with 30% of all advisors.