Why It’s Easier To Market To A Financial Advisor Niche
Most financial advisors spend relatively little on outbound marketing – which isn’t entirely surprising, given how hard it is to differentiate and stand out in a crowded marketplace. To the extent that financial advisors spend at all on marketing, it tends to be little more than 1% to 2% of revenues, most commonly on client appreciation events for their existing clients (and, perhaps, a few potential referrals).
Yet arguably, the primary reason that it’s so hard to market as a financial advisor is that we choose to market ourselves as undifferentiated generalists, rather than targeting a particular niche or specialization. Because the reality is that once you choose a specific target market, it becomes far easier to identify specific, targeted marketing strategies that can have a favorable return on investment. Once the financial advisor doesn’t have to fight as hard to differentiate in the first place.
For instance, an advisor targeting retiring architects might join the American Institute of Architects, write a guest post for the EntreArchitect blog, speak on the Business of Architecture podcast and for conferences of architects, while volunteering on Architect association committees and forming relationships with architect-specific centers of influence. For which the financial advisor will likely have little competition at all… because few other financial advisors go deep into the architect (or any other) niche.
In fact, one of the key benefits of targeting a specific niche is the opportunity to take advantage of unique marketing channels that may be highly effective at reaching that particular niche. And in a more cost-effective manner than the broad-based, generalized marketing that most financial advisors have long since found to be ineffective. Because whatever the niche is, there will be some combination of association and/or community organizations, conferences and events, magazines and blogs, and other marketing channels that are specific to that niche, where the financial advisor can focus their marketing efforts for greater return on investment.
The Challenge Of Financial Advisor Marketing
Marketing is hard in any business, but arguably is especially challenging for financial advisors. We have to “sell the invisible” of an intangible service like financial planning. In an extremely crowded marketplace of other financial advisors all trying to market their own comprehensive financial planning and wealth management services, to consumers who can’t tell us apart, in a financial services industry that consistently ranks as the least trusted.
Accordingly, it is perhaps not surprising that industry benchmarking studies show most financial advisory firms only spend 1% to 2% of revenue on marketing (which doesn’t provide for any economies of scale until the firm has several billion of AUM). After all, what would the advisor realistically do with an outbound marketing budget anyway… buy magazine or billboard ads to build a brand?
Instead, most advisors – to the extent they spend on marketing at all – tend to focus on marketing events, where the marketing spend creates the opportunity for the advisor themselves to create one-to-one relationships with prospective clients. Yet even the popularity of buying mailing lists to invite prospects to seminar dinners has petered out, as the “good” zip codes became oversaturated with marketing. And it’s harder to even get existing clients to bring potential referrals to social events, in a world where there are fewer “unattached” prospects (who don’t already have an advisor) than ever before.
The end result is that most financial advisors end out getting the majority of their new clients via referrals from existing clients. Not necessarily because referral marketing is a “best practice”, but simply because when most advisors spend little to nothing on marketing, it’s the only thing left that could possibly lead to new clients.
Yet arguably the real challenge to financial advisor marketing is that, in a world where most advisors advertise themselves as generalists and compete on the breadth of their services (not the depth, but the breadth!) and ephemeral qualities of client service, advisors aren’t targeted enough in order to be effective in marketing. In other words, most financial advisors struggle with marketing because they aren’t targeted enough to focus their marketing efforts in a cost-effective manner.
Yet ultimately, this is precisely why targeting into a niche as a financial advisor is so effective. Because when the advisor is targeted to a particular narrow type of clientele, it’s much easier to identify specific, cost-effective strategies to market and reach them!
Formulating A Financial Advisor Marketing Plan To A Focused Niche: Architects
As a case-in-point example, let’s look at how a niche marketing plan might be developed for a particular niche (of which I have no particular knowledge): Architects.
According to Glassdoor, the average income of an architect is almost $80,000/year, and data from the Bureau of Labor Statistics indicates that the top 10% of architects earn more than $130,000/year. And of course, entrepreneurial architects who create their own architectural businesses have the potential to earn even more. So architects certainly have the financial means to hire a financial advisor and pay for financial advice.
In this context, how might a financial advisor create a marketing plan to pursue the niche of architects?
The starting point might be to figure out what architects read. A quick search online reveals a number of lists that show the top blogs for Architects, along with the top Architecture magazines. Of particular note is Architectural Record, a magazine that covers both the “art” of architecture, and the business of architecture, along with the blog EntreArchitect, which helps architects who are trying to build their own small business architectural firms. Would either of these online or print magazine publications accept a guest post or contributing article on a financial topic? Do either have options for financial advisors to buy advertising to target the Architect audience? What about getting a guest appearance on the Business of Architecture podcast?
Alternatively, as a financial advisor you could decide to start your own blog for architects. Consider the financially related issues that might be important to architects? Perhaps it’s how to offer employee benefits in a small architectural firm? Or how to make partner in a large firm? Could you learn and then share insight into how succession planning works in an architecture firm that other architects could learn from? Or how to structure a buy/sell agreement? What about the dynamics of running an architectural business, and benchmarking business results? Or what it takes to go out and launch your own architectural firm and become a small business owner instead of an employee? Notably, many of these are situations where there is “money in motion” and a need to get the advice of qualified professionals. And if you don’t like writing about these topics, you can start a podcast instead. Or a YouTube video channel.
Next, it’s time to establish yourself in the architectural community, and begin to network and find centers of influence. Which means joining an association for architects. The largest association for Architects is the AIA (American Institute of Architects), with over 250 local chapters across the US and more than 90,000 members. Another option is SARA – the Society of American Registered Architects – which has a handful of chapters in some major metropolitan areas as well. Both organizations have membership options for “Professional Affiliate” (i.e., non-architect service providers to architects) that a financial advisor might qualify for. Which then opens the door to attending meetings, volunteering onto a committee, and beginning to network with architects.
And once within the organization, it’s also feasible to begin identifying who the real “Centers of Influence” are – the people who command respect in the community of Architects, from whom a referral or recommendation is worth its weight in gold. Perhaps that’s key leaders in the architectural associations. Or members of the board of directors. Or prominent consultants that work with architects. Or writers in widely read architectural magazines. Or bloggers or podcasters who are influential with their own audience of architects. What would you do to connect with them? Find them at networking events? Reach out to engage in a partnership? Offer to be a resource to them?
Or if you have deeper resources, you might even look to organize your own event, and invite influencers as an opportunity to give them exposure and benefit them (and in the process, benefit you as well)! Could you organize a specialized conference of your own in your niche? Or a pre-conference workshop in conjunction with one of the associations or other major architectural industry conferences? Could you create your own Awards recognition problem for Architects, or some subset of service providers to architects, giving them (and you) something to talk about?
Of course, an even better approach than just finding and networking with Centers of Influence, is to attempt to become one yourself. Perhaps you could do a study on some financial aspect of the business of architecture, and publish the results in a white paper. What’s the best way to break away and start your own architectural firm? Or to attract Millennial architect successors? Or make partner at your architectural firm (and unlock bigger income potential)?