7 Ways Advisors Can Build Their Firms

2. Build a Marketing Funnel

A firm’s marketing funnel would start with the “awareness” phase, using organic, or free, social media, native advertising, display advertising and SEO, according to Allen.

The next stage, a potential client’s “consideration” phase, relies on website content and paid social media and search content. Advisors shouldn’t ask for anything at this stage but should offer free guides, downloadable material or web courses, Allen said.

At the target client’s “decision” stage, the firm might use an email “nurture” or journey and sponsored email.

Allen detailed how an email nurture program would work. It would start with a newsletter that the potential client downloaded in exchange for their email address, followed by a recipient decision tree and a “drip” campaign based on their response.

If a potential client opens the firm’s newsletters three or four times, the advisor can follow up by sending an e-book. If they open the e-book, the advisor might follow with an email suggesting a telephone chat.

For those who don’t open the newsletters at least three times, the advisor might follow up by sending a video, said Allen. If the recipient opens the video, she advised following up with an e-book. And if they don’t open the video, it’s time to end the “drip,” she said.

“This really demonstrated the power of marketing automation and the tools that we have at our disposal now,” said Allen. “Any advisor can build this.”

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3. Create a Social Media ‘Cadence’

Firms should set a social media schedule they can commit to and that their target audience can consume, according to Carson, an RIA that offers advisors coaching and other support. Allen offered a sample cadence that advisors can customize.

Industry news and engagement, such as sharing and giving a take on articles, or liking, sharing and commenting on posts in the advisor’s network, can form the foundation for this social media program. Allen suggested engaging in this way once or twice a week.

Advisors might offer branded content weekly. This could involve sharing blog posts and other content from the firm’s website.

Thought leadership pieces, published once every two weeks, require more time and effort but the payoff is often better, according to Allen. This could involve writing and sharing articles, posting videos in which advisors share their views on industry developments, or sharing employee thought leadership videos.

Personal social media content, to post as time allows, should show the advisor’s personal side and interests outside work. Sharing only work-related content can make the advisor appear inauthentic, according to Allen.

She recommended that advisors choose one social media platform to focus on and said it should be tied to their audience.

One caveat: Advisors should see if prospects are open to receiving content on their favorite platforms — and choose the ones that people use for work. Those who use Facebook to keep up with family and friends may not want to see content from advisors there, she explained.

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4. Consider M&A

Belluomini cited several reasons why M&A is attractive and, citing aging advisor demographics, predicted heightened deal activity would continue for the next 15 years.

Merging with or acquiring another firm can boost assets under management, help to add or retain top talent, provide succession planning and add new or stronger capabilities, such as estate or tax planning, for existing clients, he noted.

Firms with strong second- or third-generation advisors make “extremely attractive” acquisition targets, he said.

Advisors looking to sell as part of retirement and succession planning “are most valuable five to seven years before you’re looking to exit, so this isn’t something you want to be doing 18 months before you decide to exit the business,” Belluomini said.

Advisors with “runway” to help nurture younger advisors or make sure the acquirer takes care of their clients are more valuable to the buyer, he explained.

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5. Signal M&A Interest

Advisors interested in buying a firm or selling their own practice should let people know, and can start locally, Belluomini said.

“Make your M&A desires known,” he said.

Ask people if they’re interested in selling their firm or if they have a written succession plan, Belluomini suggested, citing an advisor who took this approach when meeting other advisors and completed many deals. It was “remarkably successful,” he said.

He also recommended advisors attend conferences and work with their broker-dealer or registered investment advisor.

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6. Focus on Next-Generation Advisors

Attracting young advisors and interns can help a firm grow organically and inorganically, Ragatz suggested.

She noted four industry headwinds, including a succession crisis partly fueled by advisors’ aging, a “dismal” retention rate among newly hired advisors, a lack of diversity in the profession, and higher expectations of new advisors based on industry “professionalization” — the rise of undergraduate certified financial planner programs.

“These young students graduate and they think of themselves as professionals,” she said. “They think of themselves more along the lines of an accountant than they do along the lines of an insurance salesman. So they view themselves as professionals and they expect the industry to treat them as such, and that’s created some tension points.”

More than a third of advisors expect to retire in the next five to 10 years, and they manage about 40% of industry assets, according to Ragatz, who said about 25% have yet to plan for transitioning those assets.

Ragatz also cited Cerulli Associates research indicating 72% of new advisors left their jobs last year, indicating, among other points, that the industry is doing a poor job with training. (Carson Group has a two-year development program with no sales goals attached, she noted.)

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7. Appeal to Next-Gen Passions

The financial industry is attracting young people with a passion for improving their communities — low-income people included — and helping people achieve financial freedom, said Ragatz, who works with Carson Group’s interns.

To latch into this next generation, firms need to shift their rhetoric, marketing and narratives to show financial advising is a career where people can make an impact and bring themselves and their values to work, she added.

“I think companies that don’t do that and firms that don’t do that are really going to suffer with this new, emerging market of financial advisors,” she said.

Ragatz predicted the industry will look “markedly different” in 20 years.

That mission-like approach to financial advising, rather than entering the field primarily for career stability and making money, should lead to a better class of financial advisors, Belluomini said.

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