Every day, I make a point to spend at least an hour on the phone with independent financial advisors talking about their marketing. We review what they’ve tried in the past, what has worked, and what was a waste of money. Through these conversations, I uncover a fundamental misunderstanding that advisors often share: that marketing should be easy.
Marketing can be easy, depending on what you’re selling. It’s easy to get people to order a cheap new gadget on Amazon. It’s easy to get people to sign up for a free webinar. It’s even easy to get people to come to a free steak dinner to learn about annuities. But let me tell you the truth about marketing for financial advisors: finding qualified prospects who are in a position to hire you now is not that easy.
How Many Qualified Prospects Are There?
Let’s say that as an independent financial advisor, you’re looking for clients in their 50s or 60s who have $500,000 or more in investable assets. While you probably hear all the time that there are 10,000 Baby Boomers retiring every day, that doesn’t mean that they’re all qualified prospects.
Many of them have no savings and plenty of debt. According to Money.com, one in three Americans have nothing saved for retirement. Data from a 2013 U.S. Census survey shows that of the 59% of 65-year-olds that have saved anything for retirement, the median nest egg is only about $104,000.
How Often Do People Hire A Financial Advisor?
Choosing someone to manage your money is different than purchasing a handbag or even a car in that most people only make the decision to hire a trusted financial advisor once in their lifetimes. Many people will purchase a house more often than they will hire a financial advisor.
Let’s consider that of the small fraction of those Baby Boomers who have at least $500,000 in investable assets, over 35% of those folks are already working with a financial advisor (according to a 2016 Harris Poll).
For the remaining fraction who have saved at least a half a million dollars without a financial advisor, let’s think about their buying process. The obvious option is that they continue to run their finances on their own. Another option is to hire a financial advisor.
How Do People Choose A Financial Advisor?
There are an estimated 300,000 financial advisors in the United States. We know that most people choose a financial advisor who is near their physical location. They could choose a robo-advisor or hire someone at the Edward Jones office down the street. So for the fraction of Baby Boomers with money to invest who are looking for a financial advisor in your area, how do you stand out?
That’s the reality of finding new clients as an independent financial advisor. There’s a small number of qualified prospects who will likely only make the choice to buy once in their lives. And how do they choose an advisor? The most common way is by asking for a referral. Who do they ask? Friends, family, and coworkers who they perceive to be successful.
The Truth About Marketing For Financial Advisors
The next time a marketer tells you that it’s easy to get 12 new leads a week using Facebook ads, ask yourself if there are hundreds of qualified prospects in your area choosing to work with a financial advisor because they see an ad in their Facebook feed. Unfortunately, that’s just not realistic.
The reality is that marketing for financial advisors involves a lot more strategy and a lot more work. Give yourself a break if you feel like you’re the only advisor out there not getting new clients banging down your door after finding you on Google.
Even top advisors have to think long and hard about how to find qualified prospects and spend time and money to create marketing strategies that work. The first step is realizing that choosing a financial advisor is an important decision that people don’t (and shouldn’t) take lightly.
To learn more about the truth about marketing for financial advisors and what’s really working for advisors today, watch my exclusive webinar here.