For financial advisors, promoting and marketing their business can be a daunting challenge. Do you go the social media route? Do the old school methods still work? Is there simply a better way to build your book of business? Jay Coulter and his firm, the Resilient Advisor, are coaches and consultants to RIAs and financial advisors, aiming to give them the tools and best practices to expand their businesses and maximize their resources. He joins the ETF Think Tank to share some of those tips and what he has learned over the years.
Measuring success as a financial advisor on social media really depends on the advisor and their approach to marketing & sales. 90% of the time, advisors realize they don’t need to spend that much time on social media at all. If your target client is dentists, for example, social media probably isn’t necessary because dentists don’t spend a lot of time there. For advisors that are utilizing social media, Coulter says that views, impressions, and call-to-action clicks are good measuring sticks.
Understanding your client base and which ones are generating the biggest bang for the buck are vital keys for success. Coulter suggests sorting your book of business by revenue generated over the past 12 months and use the results to assign A, B, C, etc. ratings to each client. If you optimize and segment your client base, you can get new referrals and introductions just from your top revenue generating clients. Ask yourself how much time you’re spending with these top clients. The more time you spend, the more your relationships will expand.
With that, however, simplicity is key. The more complex your segmentation process is, the more likely it is to break. Using revenue as a way of ranking high to low in terms of importance is a good start because 10-15% of clients usually provide more than 50% of revenue. It’s the advisor’s job though to assess lifetime value on their client base. Some can be upgraded or downgraded based on potential or how they want to be contacted.
The new high yield fixed income environment presents both opportunities and challenges for advisors. With Treasury bills now yielding more than 5%, advisors need to work extra to explain and demonstrate how they can add value for clients. One example is through building Treasury ladders. A lot of advisors have needed to re-learn how to build Treasury ladders and a lot of investors don’t understand it either. That provides an opportunity to connect with clients.
An important concept for advisors to master is how to differentiate themselves from other advisors. Coulter says that it all comes down to understanding the client. Before investments are even discussed, good advisors need to understand the pain points and figure out solutions before pitching anything related to securities. Some people don’t need investing advice or portfolio construction because they’re already comfortable doing it themselves. What they might need more is tax planning, estate planning, or business planning instead. Conversations and relationships should be built around exactly what the client is looking for.
With artificial intelligence growing at an incredibly rapid pace, advisors should be getting in front of the trend and working to understand how they can leverage it now. AI can give advisors the opportunity to be truly present when talking with clients. You can ask AI tools to take notes and have the conversation completely documented while you’re engaging with a client or prospect. It can also be used to assist in practice management and build better custom proposals. There’s a lot of opportunity for financial advisors who are willing to get in front of it.
Other key takeaways:
- A tactic Coulter likes to use is NOT using business cards at networking events. If someone asks for a card, you can say you don’t have one, but ask for their contact info instead. That way, you’ve got the contact info in hand.
- Coulter isn’t using Threads right now and isn’t currently applying pressure on anyone to use it.
- Among the resources out there that Coulter recommends advisors check out: Samantha Russell with FMG Suite, Roger Whitney, Brad Johnson with Triad Partners, and Dave Zoller.
- Tiering the fee schedule is important. A lot of advisors would benefit from separating financial planning fees from investment management fees. You can save clients a lot more money with proper tax planning than you can by saving basis points on the expense ratios of different funds or ETFs. Charging lower fees for higher end clients can encourage them to grow and expand existing relationships.
- Investments are only a commodity to a commoditized advisor. If you can understand the process and understand a prospect’s personal values, that can be the best way to win new clients before you even get into discussing investments.
You can watch a replay of this virtual happy hour on our YouTube channel here. While there, subscribe to our channel to stay up to date on our latest content.
Disclosure
All investments involve risk, including possible loss of principal.
The material provided here is for informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested, and can be affected by changes in interest rates, in exchange rates, general market conditions, political, social and economic developments and other variable factors. Investment involves risks including but not limited to, possible delays in payments and loss of income or capital. Neither Toroso nor any of its affiliates guarantees any rate of return or the return of capital invested. This commentary material is available for informational purposes only and nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security and nothing herein should be construed as such. All investment strategies and investments involve risk of loss, including the possible loss of all amounts invested, and nothing herein should be construed as a guarantee of any specific outcome or profit. While we have gathered the information presented herein from sources that we believe to be reliable, we cannot guarantee the accuracy or completeness of the information presented and the information presented should not be relied upon as such. Any opinions expressed herein are our opinions and are current only as of the date of distribution, and are subject to change without notice. We disclaim any obligation to provide revised opinions in the event of changed circumstances.
The information in this material is confidential and proprietary and may not be used other than by the intended user. Neither Toroso or its affiliates or any of their officers or employees of Toroso accepts any liability whatsoever for any loss arising from any use of this material or its contents. This material may not be reproduced, distributed or published without prior written permission from Toroso. Distribution of this material may be restricted in certain jurisdictions. Any persons coming into possession of this material should seek advice for details of and observe such restrictions (if any).
