Financial advisors know better than most about the importance of portfolio diversification. A well-diversified portfolio aims to limit an investor’s risk while still providing growth opportunities. As marketing channels have proliferated over the past decade, marketers are now subscribing to that same diversification approach for similar reasons. Regardless of size, more RIAs than ever are recognizing the importance of diversifying their marketing efforts—out of necessity. Recent benchmarking studies are revealing that ex-market gains, many firms are not growing. And while referrals are still a great way to drive new business, they are not enough in today’s complex and competitive marketplace.
As a result, leading advisory firms are now embracing, as part of their marketing diversification, direct-to-consumer (DTC) marketing efforts that are common in other industries but relatively new in wealth management. And they are doing so for a very good reason: DTC marketing can help advisors scale in a much more efficient manner than historically relied-upon organic efforts such as referrals.
It’s easy for advisors to rely on the marketing methods that have helped them grow in the past. However, with new competition coming from large, well-branded firms that have created strong DTC efforts, the need to recharge marketing efforts is more important than ever.
Not only does DTC marketing give you control over your growth and drive scale, investment bankers and valuation experts alike will tell you that firms with proven organic growth engines are valued at higher multiples. So, firms that excel at generating growth organically reap the dual benefits of income today from new AUM onboarded as well as higher business valuations tomorrow.
The good news for advisors who want to increase their marketing efforts is that there are many DTC marketing and lead generation tools and tactics that are available to advisors, even with small budgets. These modern, digital methods take advantage of powerful targeting capabilities that simply don’t exist in analog properties, creating tremendous efficiencies and scaling opportunities for firms of all sizes. A note of caution however, DTC marketing requires a commitment to testing and learning and to analytics. While the tools and tactics below are proven to work, not all will work for everyone. DTC marketing is the most measurable marketing that exists, so let the numbers guide good business decisions to create the results that can transform your business.
Paid search—Probably the most well-known type of DTC marketing, paid search allows advisors to bid on keywords that they believe will drive clickthrough to their website. For example, you may bid on “financial advisor in San Diego” or the name of your firm. The costs are driven by the market with the more attractive keywords being more expensive. However, you can set a budget and adjust as you learn what works for you.
Social media—Placing ads on social media, such as Facebook or LinkedIn, allows you to reach your target audience in an efficient manner. Similar to paid search, you can set your budget on a daily basis. From our experience, creating value for users in your ads, such as promoting content assets like guides or case studies, works well to drive lead generation.
Retargeting—Retargeting enables you to serve ads to users who visited your site but did not take an action, such as submitting a form for an appointment. The ads “follow” the visitor through their digital journey and keep your brand in front of the prospect.
CTV—Connected TV allows you to serve ads to viewers who are watching shows on a connected device, such as Amazon TV. CTV also allows you to target viewers based on what they are watching, which creates an opportunity for contextual advertising. This approach helps create even more engagement with the viewer.
SEO—Good search engine optimization ensures that people who are searching for you, or for words connected to what you do (e.g., financial advisor) find you. There are many highly recommended resources that can help you make sense of search engines’ algorithms to optimize your visibility.
Site optimization—Does the architecture of your website drive the behavior that you’re looking for? Site optimization helps you achieve results by fine-tuning the user experience. For example, offering an educational content asset on the home page can drive a higher conversion than if the same asset is buried deep within the site.
While DTC tools are relatively new to the independent wealth management space, they hold much promise to supplement and diversify lead generation and marketing efforts. However, good marketing always starts with a strategy. So, before venturing into the DTC waters, be sure you have in place a precise definition of your target market and an elegant articulation of your value proposition.
Gary Foodim is the chief marketing officer for Mercer Advisors and a former Condé Nast marketing executive.