According to a 2018 Fidelity RIA benchmarking study, “Consistent high-performing firms focus on higher value and younger clients.” Those same firms also experience higher organic AUM growth, obtained by retaining and cultivating client relationships.
This is good information, yet not enough to develop a solid content marketing strategy. Age is a demographic, not a niche market. For advisory firms to compete in a digital age, targeting needs to be more selective. In this article, we’ll look at how to develop an ideal client profile.
Don’t Ignore the Mass Affluent
Younger clients in the early stages of wealth building produce a faster organic growth rate because they are more active in their investing. Job promotions come more frequently. Real estate acquisitions are common. Risk tolerance is higher, so the numbers go up quickly.
Advisors are typically taught that real growth only happens when you target high net worth prospects. This is a fallacy. A twenty-five-year-old with $500K in assets can grow a portfolio to several million if they have access to professional financial advice.
When developing an ideal client profile, don’t ignore the mass affluent. Put a ceiling on age if you like. Keep the lower end of the asset threshold at or slightly below $1 million. That will make the initial prospect pool larger. You’ll narrow it later with additional qualifiers.
Evaluate Your Strengths and Weaknesses
Prior to defining your ideal client, perform a S.W.O.T. analysis on your firm. Evaluate strengths, weaknesses, opportunities, and threats. Wealth management firms rise and fall by building or destroying their reputation. Understand what you’re capable of before taking the next step.
It’s critical at this stage to be completely honest with yourself. Everyone agrees that firms should “target young prospects.” If you have no patience for twenty-somethings, don’t build a marketing campaign aimed at them. Raise the age threshold to over thirty.
Opportunities and threats are key components here for building a value proposition. Advisors with prior experience in another industry have an opportunity for natural marketing, but risk SEC violations if they’re too close. S.W.O.T. will reveal those potential pitfalls.
Learn How to Tell Your Story
Telling the same story repetitively will make you a better storyteller. An earlier Fidelity study, conducted in 2012, found that only 3% of high-performing firms market to prospects outside their ideal client profile. The other 97% are telling the same story to everyone.
Your story is based on your value proposition. It should also include origin information and maybe a funny anecdote or two. Don’t confuse it with your company message or mission statement. Those are static pieces of content. Your story is a live presentation.
Repetition isn’t the only way to improve your story. Each successful client relationship becomes a part of the tale. If you narrow your niche market down properly, you’ll find connections between prospects and existing clients. Use those common bonds to close deals.
Make a List of Niche Market Qualifiers
I’ve worked with advisors over the years who target airline pilots, teachers, professional athletes, and women entrepreneurs. None of them use age as a qualifier. All of them are successful. There’s a lesson to be learned there. Don’t let age disqualify good prospects.
A niche market should be developed based on the S.W.O.T. analysis of the firm combined with the background and story of the advisor. Completing those two steps should make it obvious who you should prospect. Narrow your target pool based on that.
As for the age demographic, you’ll find that younger prospects will find you naturally if you market your firm online. According to a 2018 research study by the Oeschli Institute, 43% of affluent prospects under age 45 start their financial advisor search online.
Leave Geo-Targeting to the Search Engines
A long time ago, in a galaxy far, far away, content writers had to use geo-targeted keywords to pull in local traffic for a website. That’s no longer necessary. If you want front page positioning for geo-targeting, submit your firm’s website to “Google My Business.”
If I were an “SEO guy,” I’d probably try to convince you it’s more complicated than that. It’s not. SEO is important when you start writing content because you’ll want to key on words and phrases that connect with your niche. Geotagging is handled automatically.
Google does this because in the past it was too easy to mask your physical location with local keywords and bogus meta tags. “Google My Business” verifies your address by sending you an actual piece of snail mail. Submit, get the mailer, confirm with a code, and you’re mapped.
Utilize Technology to Facilitate Faster Scaling
One of the many companies I’ve invested time and money into over the past decade is a firm called Blueleaf. They automate client reporting and communication. Remember that suggestion about not ignoring the mass affluent? Automation is how you do it.
Find software to automate your processes. I’ll have more on that next week. You’ll also want to keep an eye out for my new eBook, titled “Remote First.” It’s scheduled for release early next month. Subscribe to our blog so you don’t miss any updates.
Kevin D. Flynn is the founder and CEO of AdvisorScale Financial Writing. When he’s not writing or on the golf course, he spends his “free” time designing WordPress websites or creating business sales processes for start-ups. In addition to AdvisorScale, Mr. Flynn is also the Executive Director of H.E.L.P. for Young Readers and Managing Editor at October Golf Magazine. He lives in Leominster, Massachusetts, with his wife Evelyn. They have four adult children, two cats, and eight wonderful grandchildren.
