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Q&A: Charles Schwab's Kimberly Sanders

Kimberly Sanders, Schwab's director of business consulting services, on the biggest challenge advisors face when marketing their services to clients.

WealthManagement: What’s the biggest challenge you’ve seen when it comes to marketing wealth management services?

Kimberly Sanders: The biggest marketing challenge I’ve seen RIAs face in recent years is finding ways to differentiate themselves in a field crowded with quality and compassion. Over the last 10 years, we’ve seen a migration from the traditional wealth management channels to independence, and RIAs clearly have the winning model. What was once seen as a trend has become a movement. As the industry has grown, so has the competition. Most financial services firms are beginning to position themselves differently to better compete in the marketplace. This repositioning is happening with traditional firms as well as across the RIA space. As wirehouse and independent broker/dealers begin to recognize the merits of the RIA model—especially from an investor standpoint—they’re trying to emulate it. Wealth management services, once a differentiator for RIAs, are becoming table stakes for almost all financial services firms. This is making it harder for investors to understand the difference between an advisor in the traditional model and an RIA. As the high-level value proposition between the channels gets closer, it will naturally become more difficult for RIAs to attract investors from the traditional model. RIAs will need to do more to continue to win in the marketplace.

WM: What, in your opinion, do most advisors get wrong about marketing?

KS: Far too often, we engage with advisors who are afraid to identify, and articulate, a firm-wide value proposition. They fall into the trap of trying to be all things to all people, instead of digging deep to identify the qualities that make their specific firm irresistible to their ideal clients. The hallmarks of the RIA industry—independent, holistic, fee-based/fee-only, financial planning, client-centric—are no longer enough to differentiate one RIA from another.

What excites me is that we can see the seeds of change in the results from Schwab’s June 2017 Independent Advisor Outlook Study.

  • Nearly half (41 percent) of advisors say the independent model will differentiate most significantly from captive models by offering clients a broad range of services—such as tax planning, charitable planning, and healthcare planning—that fall outside the realm of traditional portfolio management.
  • 44 percent of advisors have already begun providing more services to clients without charging for them, and two-fifths (40 percent) have been putting more time into each client without an increase in fees.
  • Technology remains front and center; 76 percent of advisors think advances in technology help keep their firm ahead of the curve.

The challenge will be weaving these differentiating services and investments in technology and talent together with the heart and soul of the firm itself. This unique collection of benefits will become a sort of tapestry that tells a story that resonates with their staff and their ideal clients.

WM: When you get requests from advisors, are they looking for ideas and guidance, or resources?

KS: Well, this may be an obvious answer, but I choose option D—all of the above. At Schwab, our consulting engagements are designed to go deep into a firm’s business and solve their unique challenges. We are most often approached to help firms think critically about their goals, to work collaboratively with the management team to develop a strategy and finally, to craft an implementation plan designed to build accountability into the process. Throughout the consulting engagement, we’re providing best practices from other advisors, metrics from our annual RIA Benchmarking Study and introductions to service providers that may be viable to help support their implementation plans.

As it relates specifically to marketing, most firms are looking for help in digging deeper. Advisors often tell us that they don’t know what makes their firm unique, they just know that they are. We’re hearing more and more from our clients that this is a particular challenge.

WM: Do you offer marketing services as a “value-add” to your core offering, or is it an integral part of the service you provide?

KS: For more than 20 years, we have been working hand in hand with advisors, leveraging our deep expertise in core business issues to help firms achieve their goals and gain competitive advantage. Whether through deep one-on-one consulting engagements, industry-leading benchmarking tools, or ongoing thought leadership and education, we are committed to helping advisors benefit from proven practices of the industry’s most successful RIA firms.

We focus solely on independent advisory firms, concentrating our expertise on a core set of issues that growing firms encounter. For example, in the 2017 RIA Benchmarking Study, we see that the top strategic initiatives remain unchanged, with a steadfast focus on client acquisition. When working with growth-oriented firms, we often start with strategic planning. Once their plan is on paper, firms looking to grow tend to gravitate to firmwide initiatives related to managing client profitability, creating a referral culture and leveraging centers of influence.

Our work is focused on a core philosophy that puts advisors first. As long as advisors are focused on creating sustainable growth, these programs will be an integral part of the service and expertise we provide.

WM: What can industry service providers do better if they want to provide marketing support to advisors?

KS: The most positive feedback I hear from advisors comes after a service provider has taken the time to listen to their ideas, fears and questions, followed by spending some time on education. When advisors are reaching out for support, it is often because they don’t have the expertise, confidence or time to tackle an issue on their own. In those cases, a pitch simply won’t work. The advisors may be attracted to the bells and whistles of a well-packaged solution, but if they don’t understand how that solution is going to help them to delight their specific clients, they’ll have a hard time taking the next step.

As difficult as it is, it’s clear that there are RIAs and service providers who are doing this very well. In the 2017 RIA Benchmarking Study, we see that the 5-year net organic growth CAGR for fastest-growing firms is almost four times that of all other firms. (The fastest-growing firms are the top 20 percent based on a 5-year net organic CAGR for all firms $250M or more in AUM.) This divergence in performance is influenced by the ability of the fastest-growing firms to not only excel at referrals from existing clients and centers of influence—which are foundational for growth—but also to win new clients through other marketing strategies such as networking, community involvement, website presence, seminars and events, and other outreach. These firms are employing a broad set of marketing tactics to optimize client acquisition, and bringing in more and larger clients.

These results point to how some advisors are adapting to the rapid pace of change in the industry. I’d encourage all of the service providers who are focused on this industry to help advisors create a message that ties together their spirit, the investment they’ve made in people and technology and the needs of their unique set of clients. I believe that by working together, we can continue to help these amazing firms tell their stories in a way that will get them heard and repeated by their ideal clients.


Kimberly Sanders is director of business consulting services at Charles Schwab. She's participating in a marketing panel at the Executive Forum on Oct. 11.

TAGS: Marketing
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