Why Financial Services Firms Need Business Development Professionals

Once upon a time, professional service providers—RIA's, wealth managers, CPAs, attorneys—were people whose personality and training led them to careers that were more "left-brained," "black and white," and quantitative. Promotions were based on hours worked, diligence, demonstrated core competency and not in number of new client relationships or business development activities. Managing directors and partners used to be responsible for following up on inbound inquires that removed them from their core responsibilities (in some cases, even billable hours). This was, for the most part, ineffective for several reasons. The amount of time and energy spent in gaining a new client is significant and furtheremore, correlates to the size of the prospect. Since many of these investment professionals are seeking significant new UHNW/HNW clients, it should also be noted that it takes a greater amount of time and effort to "reel in" more significant clients. Formerly, business development within these firms was limited to golf and business lunches. That is changing today, though unevenly, among firms. Professional services firms (financial services, in particular) have been slow to adopt the notion and expense of building out marketing departments to create messaging and visibility to generate awareness and leads and hiring dedicated business developers to follow up on those leads.

Today, most firms are in agreement that business development is a necessary effort, but there is broad interpretation as to what the model should look like, how it is defined, how responsibilities are divided, what the components are and how to integrate these efforts alongside the firm's professional staff. And, probably the greatest challenge: how to create a culture that is business development oriented and engages staff on all levels.

The expectation today of most firms is that their professional staff must think like marketers rather than stock market researchers, for example. Without substantial training, this is nearly impossible for most money managers, et al. Business development/marketers are typically more splayed in their thinking and approach to a potential client. The wealth manager might be focused on a lead and focus on increasing their AUM, while business development professionals often see more areas of potential business possibilities beyond the obvious. The explanation may be in their orientation and experience, and sometimes in their personalities. It is no secret that more outgoing, relationship-oriented people are successful sales, marketing and business development professionals.

But, all hope is not lost! Today's forward-thinking wealth management and financial services firms have embraced potential return-on-investment from dedicating significant resources to marketing and business development efforts. This has led to cutting-edge content offerings such as webinars, podcasts, newsletters, video briefings, white papers and blogging. Other firms have used their in-house or outsourced marketing services to carefully narrow their focus by concentrating on certain niches rather than mass marketing as in the past. These efforts have yielded significant results for those engaged in the new media and digital connectivity that is available today.

Technology has brought many tools for business development, whether for a small firm or part of an large enterprise. Sophisticated CRM systems help manage prospects and track sales progress, while other types of systems are available to provide vetted, UHNW/HNW leads mapped to your own existing prospects and clients. These products have made business development into more of a warm, friendly circle rather than the old-fashioned cold call.

David Mamet's powerful play/movie, Glengarry Glen Ross depicts the "classic" sales environment when Blake (played by Alec Baldwin) comes to provide "motivational" sales training from the corporate office. In the movie, Blake sets out the rules: "We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? Second prize is a set of steak knives. Third prize is you're fired."

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