How To Find Clients as a Financial Advisor
Becoming a successful financial advisor is a unique challenge with many moving parts. In addition to completing the required educational courses, many financial advisors become certified financial planners (CFPs) or chartered financial analysts (CFAs) to stand out from the competition.
After all, according to the U.S. Department of Labor, there are 321,000 financial advisors (as of the latest U.S. Bureau of Labor Statistics numbers). Building a solid business book can be challenging in such a crowded field. The following tips can help new financial advisors make their marks and seize market share.
Key Takeaways
- Establishing yourself in a competitive field such as financial advising is challenging, but there are ways to gain a foothold.
- Growing your network is essential, but that means reaching beyond your inner circle to develop personal relationships with a variety of people.
- Look beyond soon-to-be-retirees as clients and find relatively underserved markets to be competitive.
- Get involved with your community through volunteering and other programs to feel connected and find potential clients.
- Cold-calling, door-knocking, and other conventional sales techniques can close prospective clients, but they take much more time.
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Cultivate Your Influence
New financial advisors should reach outside their inner circles to grow their networks and increase their referral bases. While this may be achieved via social media marketing, developing personal relationships tends to be a more effective solution.
“My advice to financial advisors just starting out is to leverage centers of influence such as accountants, attorneys, HR directors, business roundtables, as well as using social media,” says Donald Reichert, exit planning specialist and founder of the Reichert Company. Since it takes time to solidify relationships, Reichert said it’s really import to network early in one’s career.
Serve the Underserved
While retirees and those nearing retirement are an obvious source of business, financial advisors should also look to underserved populations to drum up clients.
“While most advisors work with retirement-aged individuals with lush portfolios, I focus on the underserved young professional space,” says Matt Cosgriff, CFP, director of wealth management at BerganKDV Wealth Management in Minneapolis, Minnesota.
Become Involved in the Community
One of the best ways advisors can win new clients is by stepping up personal involvement in their communities. While traditional marketing campaigns cost money, community involvement only requires time. By volunteering with causes near and dear to them, advisors can connect with other like-minded individuals who may one day become business clients.
Host Webinars
There’s a reason Ted Talks have become so effective among social media and tech influencers. They allow knowledgeable professionals to explore their areas of expertise in depth while highlighting their skills in a public forum. Such online presentations have turned many otherwise obscure experts into mini-celebrities.
Most financial advisors won’t be able to host a TED Talk, but they can still find other venues to create value and demonstrate their expertise to the public. Hosting an online webinar on financial literacy is a cost-effective way to highlight the importance of financial planning while also building one’s brand as a financial expert.
Build Your LinkedIn Network
Social media is another powerful tool for professional development. Since wealthy clients tend to be connected with other wealthy people, a strong social media presence can help build one’s reputation and reach a large network of potential investors.
But there’s more to LinkedIn than sending out connection requests. Social media experts recommend using LinkedIn to create and publish relevant content, building your brand as an experienced professional. When successful, this content might even go viral, generating media attention and introducing your brand to other potential clients who would never have encountered your name.
Engage in Paid Marketing Campaigns
Finally, one should never underestimate the value of paid advertising. Digital advertising is one of the most cost-effective ways to reach prospective clients, and the ads can be targeted with ever-increasing accuracy. They can even target users who have already visited your site, allowing a fairly simple way to re-engage interested users.
Strategies That Provide Little Return
For new financial advisors, cultivating clients is a numbers game that may also be won with the following outreach methods, although the process may be very slow:
- Cold calling
- Knocking on doors
- Providing free meals to encourage attendance at presentations
- Setting up fish bowls to collect business cards at trade shows
Devin Carroll, the founder and managing director of Carroll Advisory Group, says there are no shortcuts to generating clients. “For the first 10 years as an advisor, I struggled with the client acquisition process. Cold calling, door knocking, seminars, and hoping for referrals were my only tools. And while these methods worked, they were painfully slow.”
How Many Clients Does a Financial Advisor Have on Average?
The size of a financial advisor’s practice is generally determined by the type of services they provide and how much time they dedicate to each client. Some research has suggested an industry average of about 100 to 150 clients per lead advisor, allowing them to provide sufficiently personalized services while also managing the non-client-facing aspects of the business. However, others suggest running a boutique practice of as few as 75 or even 50 clients. This would mean higher fees for each client but more time to dedicate to managing each client’s assets.
What Is an Ideal Client for a Financial Advisor?
The ideal client is someone who knows the value of professional financial advice. This doesn’t necessarily mean that they follow all of their advisor’s recommendations. Still, they should appreciate the amount of expertise, knowledge, and training required for a career as a financial professional. This can help ensure that the client has a serious, successful relationship with their financial advisor.
What Kinds of Clients Does a Financial Advisor Have?
There are many different types of clients, depending on the type of services that a financial advisor provides. They can range from mid-career professionals to retirees and the extremely wealthy. Some advisors serve institutions, such as pension funds or mutual funds.
The Bottom Line
Those looking to hire a financial advisor tend to choose professionals they grow to trust through naturally evolving relationships. By pairing community involvement with robust networking, advisors can build a firm that will grow for years to come.
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