Identifying the gaps: Where financial adviser marketing efforts miss the mark

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In the competitive world of providing financial advice, effective marketing can be the dividing line between a flourishing business and one that struggles to attract and retain clients. Despite best efforts, many financial advisers find their marketing strategies failing to deliver expected results. Here’s a look at the crucial areas that could be falling short and how to remedy them.

 

Know who you are trying to reach

The first potential pitfall in your marketing strategy is not having a clearly defined target audience. Without a specific demographic in mind, your messaging can become too broad or generic, failing to resonate with the people you’re most equipped to help. The key is to clarify the persona of your bullseye target, to consider the unique needs of your ideal client — be it business owners, retirees, young professionals, or high-net-worth individuals. Then you need to tailor your communication to address their specific concerns, goals, and financial situations.

 

Know what you’re trying to communicate

Once you know your audience, the next step is to clarify your message. What exactly are you trying to communicate to your prospective clients? Your marketing should underscore your unique value proposition — what sets you apart from other advisers. This could be your bespoke approach to financial planning, your expertise in a particular investment strategy, or your commitment to personal service. Your message should be concise, compelling, and consistently woven through all your marketing materials.

 

Identify the right channels to use

Selecting appropriate marketing channels is paramount. If it’s business owners you’re trying to attract, maybe business networks such as your local Chamber of Commerce or business forums are the place to be. Or are you trying to reach new clients through introducers such as accountants, solicitors or tax consultants? Or is most of your marketing effort going to be carried out online?

The platforms you choose to disseminate your message should align with where your target audience is most active and engaged. For millennials and Gen Z, this might be social media platforms like Instagram or Twitter. Again, if it’s predominately business owners you’re targeting, then LinkedIn, news publications or even traditional media like newspapers could be more effective. It’s essential to be seen where your audience goes.

 

Make sure your content is excellent

Quality content is non-negotiable. Regardless of the channel, your content needs to be informative, engaging, and relevant to your audience’s needs. This means providing value through financial tips, insights into market trends, or guidance on common financial concerns. Content that educates and informs, rather than just sells, will establish you as a thought leader and build trust with your audience. Invest in good design and clear, jargon-free language to make your content accessible and professional.

 

Know what result you’re looking to achieve

Without a clear understanding of your marketing objectives, you won’t be able to measure success or identify areas for improvement. Are you trying to generate leads, increase website traffic, or improve client retention? Each goal requires a different approach and metric for tracking progress. Set SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) goals to focus your efforts and help you assess the effectiveness of your marketing strategies.

 

Identify the right follow-up activities

Finally, the follow-up is where many marketing strategies fall flat. Engaging potential clients is just the first step; you must have a system in place for following up on leads. This could involve a series of personalised emails, a phone call, or setting up a face-to-face meeting. The follow-up should be timely and reflective of the interest shown by the prospective client. Neglecting this critical step can result in lost opportunities and a waste of your marketing efforts.

In conclusion, a marketing strategy that isn’t aligned with your practice’s goals and your clients’ needs is bound to fall short. By knowing your audience, communicating a clear message, selecting the right channels, creating quality content, setting clear objectives, and executing diligent follow-up activities, you can ensure that your marketing efforts contribute to the growth and success of your financial advice business. Remember, effective marketing isn’t just about reaching people; it’s about connecting with them, educating them, and building relationships that last.

Happy with your hybrid planning model?

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Ever since the pandemic, there has been a lot of talk about hybrid planning models, and the truth is that they probably mean different things to different advisers. So, here’s my tuppence worth on them…

To my mind, a hybrid planning model is one where the best traditional financial planning practices are supplemented by a digital proposition that further adds value to the adviser / client relationship and ultimately supports the achievement of better client outcomes. Here are some elements that will go a long way to creating an effective, hybrid financial planning model.

 

Remote as well as in-person meetings

This is the obvious first step, and a straightforward one with the experience of the last few years. Advisers now recognise that every interaction with a client doesn’t need to be a physical, in-person meeting. Instead, a client who previously may have been met in person three of four times a year, now might only require a single in-person meeting, supplemented by several remote meetings. This saves valuable time for everyone and facilitates more flexibility around meetings – it’s a lot easier to “jump on to a Zoom call” than having to “jump into the car” and then sit in traffic… This one is a win-win for both the adviser and the client, who is now also very accustomed to and in many cases prefer effective digital meetings.

 

Online data gathering

Many advisers are now having more effective meetings with clients, by utilising a range of tools that can be deployed before a planning meeting. Rather than starting a planning meeting with a blank page, clients are requested to complete some or all of an online factfind, a risk profiling questionnaire, an expenditure questionnaire and maybe an engagement letter with the adviser in advance of the meeting. These are enabling better preparation for the meeting and a much richer client experience. A by-product of requesting this information is that advisers find that it removes “tyre kickers” – clients who give the time to providing this information are committed to the process.

 

Online supporting material

I’m aware of some advisers who have gone to significant efforts to provide excellent guidance to clients across a broad range of technical subjects – maybe business exit planning, estate planning or other such areas. Their thinking is that a better-informed client results in more engaging and valuable conversations at the actual meetings. This in no way negates the need for or value of the advice ultimately given, as a technical guide on a particular subject cannot take account of a client’s own individual circumstances or cannot consider the full range of appropriate solutions to be considered. Apart from the value clients get from such whitepapers or expert guides, this supporting material demonstrates a firm’s commitment to adding value, and also demonstrates their self-confidence in their expertise.

 

Online collaborative tools

We’ve also seen the emergence of tools that support collaboration at planning meetings. Good planning meetings are never lectures, with the adviser as the teacher! Instead they are two parties considering together a range of objectives, strategies and approaches, with “What If” questions frequently arising and being considered. Future cashflow planning software is very visual and really supports collaboration and discussion at meetings. Indeed with some of the tools, clients can use the tool and consider scenarios themselves, outside the confines of a meeting.

 

Leveraging the wider team

With this greater level of engagement and interaction, this does not have to mean that the Principal of the business or a senior adviser needs to be involved at every single touchpoint. The opportunity now exists to move some of the interactions towards a paraplanner or support person, who can work with the client through some of the interactions. Broadening the relationship beyond a single point of contact – the adviser – makes for a better client experience, removes risk in the business of an adviser leaving or being ill… and spreads the workload.

So, are you up happy with your new hybrid planning model? If developed carefully, it will add a lot of value to both your business and your clients, but like anything there is a cost involved. The challenge in this case is your capability to deliver effective remote meetings, and your ability to really understand and fully utilise the technology that you are using. For example, your hybrid model will start falling apart if you get tripped up every time you try to change something in your client’s future cashflow plan. So, the cost is a time commitment from you to fully understand and be confident in your use of the financial planning tools that you are deploying.

The benefits though really outweigh these costs.

What services will you outsource in 2024?

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As we come towards the end of another year, the minds of many financial advisers are taken up with reflecting on the year just gone and planning for the year. The good news is that the reflections are generally positive, with most firms reporting a strong year behind them, with growth in turnover, assets and hopefully profit too. They generally have been successful in attracting new clients and retaining existing clients. The aim is for more of the same in 2024.

The key challenges that advisers speak to me about are on the operational side of their business. With the growth of their business, comes greater demands on the resources of it. And the primary and most valuable resources – people – are very thin on the ground. Firms are finding it extremely difficult to hire the calibre of people they are seeking. Overlaid on top of this are an ever-increasing compliance burden, technology changing at breakneck speed particularly in the AI space and increasing complexity in managing all the parts of the business.

Help is needed before the business starts to buckle under the strain, and for many firms the answer may lie in outsourcing.

 

What is outsourcing

The Financial Conduct Authority (FCA) in the UK defines outsourcing as a business involved in an arrangement where a service provider performs a process, service or activity on behalf of a company that the company would otherwise carry out itself.

It is simply the use of third parties to carry out some functions on behalf of the firm. It’s done mainly to reduce the need to involve the in-house team, reduce cost, bring specialist expertise and to ensure some critical core functions are properly delivered.

 

What services are outsourced by financial advice firms?

With the exception of the core service of providing advice, pretty much every other function is capable of being outsourced. Financial brokers and planners retain the critical responsibility of the provision of financial advice – after all, this is what the clients want from you. Typically, the basic administration services remain in-house too. These ensure that the client relationship quite rightly remains with the core team within the business, who continue to provide the advice and service that the client values most.

But pretty much every other function is secondary, at least in the client’s eyes, and can be outsourced if this makes sense. For example, if the team are already flat out with delivering quality advice and service, there may be no more capacity to look after these additional functions. Common functions that are outsourced include,

  • IT: Most advice firms don’t have an in-house IT resource but utilise an external service provider for IT and data security services, network management and staying attuned to technology advances.
  • Paraplanning: With the growth of financial planning as a core service and the increased depth and complexity of financial plans being delivered, an increasing number of advice firms are now using 3rd party paraplanning services to develop their financial plans. The relationship and delivery of the plan remains with the adviser, with the paraplanner working in the background on the development of the plan.
  • Marketing: Most firms don’t have an in-house marketing expert and after spending time and money (each of which is in short supply) on campaigns that didn’t meet expectations or on trying to deliver regular communications to clients, they recognise the value in utilising third party expertise.
  • Compliance: While retaining all regulatory obligations, many firms now utilise external compliance resources to ensure they stay up to date with their existing responsibilities while also being kept informed of all new requirements. This is one area that firms cannot afford to get wrong.

And then there’s the rest… Examples include external HR consultants to help them recruit and develop professional HR standards and external trainers to help develop the skills within the team.

 

The benefits of outsourcing

These are numerous. The primary benefit is in enabling the core in-house team to focus on where they add the most value – delivering to clients. Equally important is the access that is gained to specialists, as opposed to muddling through tasks yourselves that you may not have the skills for.

Operational efficiency should also ensue as the third party providers specialise in these areas and should be able to complete the tasks quicker, at lower cost and to a higher standard. They also will ensure that your firm is leveraging the most advanced technologies that otherwise you might be unaware of.

 

What are the steps to outsourcing?

The place to start is within your own business, considering your operational effectiveness. What are the tasks that you should be doing, that you’re just not getting to? Once you consider this, then you can start thinking about external partners.

The key then is to identify a partner who will meet your exact needs. Speak to other financial brokers, check out industry publications or speak to the likes of Brokers Ireland who may be aware of providers of the services you are seeking. Where possible, seek partners who have a deep knowledge of the world of financial brokers so that you don’t have to spend your time educating them! After identifying a potential provider, outline what you need and seek a proposal from them. Check their references and closely examine their costs to ensure you will gain enough value from their services. Would you be better off hiring another person instead?

Consider the risks – could a third-party underdeliver and end up damaging your brand? Even worse, could their services land you on the wrong side of some of your regulatory obligations? Or could they simply underperform and be a waste of money? Challenge the 3rd party and again, seek testimonials from similar firms to your own.

And then review their performance regularly. Are you gaining the benefits you expected and does outsourcing remain the right approach for you?

 

Maybe 2024 is the year that you will build some excellent outsourcing relationships to enable you to maximise the potential of your business.

It’s time to plan for greater numbers of female clients

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As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment.

 

We have considered previously the importance of developing the best proposition and services for different groups of clients and prospects. We now consider the next action identified in the research, which focuses on planning for greater numbers of female clients in the future.

 

According to research by the Royal Bank of Canada, women will manage two-thirds of household wealth by 2030 and increase their share of global wealth from about half to 70% within two generations.[1] While women have taken significant strides in the workforce over the last two generations, much of the fortunes of men who pass away will also end up in the control of female spouses, who tend to be younger and live longer.

 

In Ireland, there are more women than men, with the ratio of men to women now at its lowest level since 1871.[2] There are also more women in the workplace today, and so demand for financial advice should increase from them.

 

More generally, it is important that couples are advised on a very collaborative basis, with the full involvement of both partners. The days of just dealing with the main breadwinner are long gone. Both voices must be heard in conversations about household finances and wealth, to engage and leverage the unique perspectives and insights of both partners.

 

Some of the specific challenges faced by women when it comes to financial advice also need to be considered. For reasons such as past inequality in the workforce and women taking breaks in their careers to raise their families, women typically have smaller asset pots than men today. In Ireland, a gender gap in pension income – the percentage by which women’s average pension income is lower than that for men’s – of 35% exists today.[3] The advice and solutions offered by Financial Brokers will play an important role in helping to close this gap.

 

So when it comes to planning to attract greater numbers of female clients, the starting point might be to review your marketing presence to ensure it is appealing to both male and female clients. Carefully review the imagery and text on your website and social media profiles to ensure it is appropriate and appealing to all.

 

The next step is to consider your own advice approach and proposition, and how well it is positioned for both male and female clients. Are you talking to your clients in an unconsciously male oriented way? Are you really tapping into the specific challenges that women are facing and building these in as a core part of your proposition and your messages? Of course as part of this, it is crucial that you have firmly communicated the importance of having both partners in a relationship at the meeting, to ensure that both voices and their unique perspectives are equally heard.

 

Finally there is real value in reviewing your client base, with a view to identifying the gender gap in household incomes. This opens up the opportunity for you to build solutions for this gap as part of your advice recommendations, adding value to both the couple themselves and for your business.

 

The bottom line is though, when you think of your target market you typically look for ways to meet the needs of the largest segment within it. Focusing on females is a sensible place to start.

 

Have the right cost model in place

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As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment.

We have considered previously the importance of developing the best proposition and services for different groups of clients and prospects. We now consider the next action identified in the research, which focuses on developing a cost model that makes sense for both the client and also for your Financial Broker business.

This starts with recognising that being a Financial Broker is a very worthy profession that delivers a lot of value to clients. Good Financial Brokers deserve to be well rewarded for the value that they add, helping clients to achieve their financial objectives and transforming their lives.

To achieve this, a well-thought-out remuneration model that is linked closely to the value added must be developed and articulated clearly to clients. This may appear difficult to some, who have simply been ‘price takers’ in the past.

While there is a sense that fixed fees may be charged for project-type work such as some complex planning services, there is a strong and unanimous belief among all Irish participants in this research project that the current commission model, particularly in relation to ongoing charging on an assets under management (AUM) basis, works efficiently and will continue.

With regard to explaining the level of charging, Brokers will need to be able to clearly demonstrate and confidently articulate the value delivered. In the future, it would be prudent to anticipate that trail commission won’t continue without value actually being delivered.

There is an expectation in some quarters that enterprise level charging structures (irrespective of where business is placed) will emerge. In this case, Financial Brokers will need to set their own pricing for different products, and not vary this based on terms given by different providers. Additional benefits supplied by a provider would then go to the client.

Charging for younger clients and those of limited asset amounts is recognised as a real challenge for the industry. They are not attractive to either providers or Brokers today, but they are the valuable customers of the future. The belief is that many Financial Brokers will take a long-term view that as these people’s careers progress and their assets build, in time they will become attractive clients. For clients with low assets, Brokers will need to continue to receive initial remuneration to make this business worthwhile, either by commission or through the levying of some form of an administration fee. As discussed earlier, the service level provided to these clients will need to be relatively light, in line with the income generated for the Financial Broker.

So, what are the steps for you to take to develop a cost model that will serve you well into the future?

The starting point is to review your current remuneration levels across your different client segments, ensuring that they are fair and equitable to your different groups of clients, and to you. Your next action is to take a step back and identify all the areas of value that you deliver, and then place a cost on these based on your time, expertise and the value experienced. This may require you to adjust your remuneration amounts accordingly.

Running in parallel with these actions, we also think it prudent to actively consider an alternative remuneration approach for younger / lower value clients, to ensure that they are not loss-making for you, while also delivering positive outcomes for the clients. Your cost model needs to be proportionate and attractive enough for these clients, while also making sense for your business.

Finally as you look forward out over the 8-10 years and should enterprise level charging begin to emerge in the future, it might be worth considering the levels of charge that you would apply to remove any suggestion of provider bias in your recommendations.

Fees and charges are always a tricky area to get right. The solutions you develop must be transparent and fair to your clients, while also providing the level of income required by your business to ensure you can afford to continue to deliver a world class service to your clients.

 

Know your target market

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As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment.

We now consider the first action identified, which is the importance of identifying and getting to know deeply your target market.

Based on the research findings and the numerous challenges faced in providing a viable and valued advice service to people of modest financial means, it is likely over the next decade that Financial Brokers will continue to mainly target the mass affluent and high net worth sections of society. Within this, individual Financial Brokers will target different segments of the market, based largely on their areas of expertise or where they can access clients easily. This is who they will target, and the positioning of their business will need to be centred around the target market. Connecting with their target group will be a primary goal and activity of the business.

Financial Brokers should consider where they can add most value. Will this be with families, assisting them in managing every aspect of a household’s finances and assisting them in achieving all their financial objectives in life? Or will their target market be business owners maybe in a specific geographic region, where the Financial Broker will be the guiding hand in all areas of wealth extraction, succession planning and achieving a successful business exit? Or will the Broker build a superior knowledge and understanding of the unique features and attributes of a particular profession and advise them – maybe sports people, entertainment professionals or people in a particular industry? Building a superior knowledge and understanding of a specific target market is a powerful positioning and will enable a Financial Broker to become the ‘go to’ person among that cohort of potential clients.

The value experienced by clients will be in the Financial Broker’s superior knowledge of a target market, the quality of advice delivered, and the products arranged to implement the advice.

That is not to say that Financial Brokers will only have clients within a narrow target market. Other clients will emerge that the Financial Broker did not actively target – some may also be high value clients, however others will be less valuable, maybe having been introduced to the business as a child of a high value client or a referred client etc. However, the marketing efforts of the business will be aimed at the desired target market – these are the people you are putting all your efforts into appealing to.

We identified a number of specific action points for Financial Brokers to carry out.

First of all, it is important to consider your available markets and the ones that offer the scale and best opportunity for you to add value and ultimately succeed. To do this, you need to build a view of the estimated population (households, businesses etc.) within your target market – there are many research resources available to help you do this. These include the CSO, government websites, local business sites etc.

Once this is completed you then decide which group(s) you will target. This will be decided based upon having confidence that the target market is viable and big enough to sustain your own business goals and ambitions, and being able to identify clear access points to this market. You need to have a good sense from the outset as to how you will reach your market.

The third point is often the one that is skipped lightly over – at a great eventual cost. It is very important to develop a deep and superior knowledge and understanding of the attributes and specific financial challenges of your target market. You need to know this market better than anyone –  the characteristics of the people, their own specific challenges, what are the concerns that keep them awake at night and what are the particular financial challenges that they face. The more you understand their own dynamics, the better you will be at empathising with them and delivering advice that is based on knowledge and expert insights. This will be truly valued advice and will enable you to stand apart from every other adviser trying to build relationships with them.

Once you have built this deep knowledge, the final step is to use it to stand apart from your competition. You do this by refining all your marketing channels and efforts to build your presence among this target market. Don’t try and talk to everyone, look to talk in a deeper way with your target market.

Rather than trying to be “all things to all people”, the first step in being a successful Financial Broker in 2030 is to identify and go after a clear target market.