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Speaking Out

Don’t be shy about marketing yourself. You have a story to tell

By Robert F. Keane

From the August 2007 Issue of Investment Advisor Magazine

There’s an idea prevalent among investment advisors, especially those using a fee-only business model, that marketing is a dirty word. They like to brag about how they don’t need a marketing plan because they do such a great job that their existing clients already refer more business their way than they can handle. To admit to having actually marketed their practices would be akin to wearing a scarlet letter trumpeting their lack of virtue on their chests.

There’s also the argument that having a marketing program runs counter to the effort to have the financial advice business be taken seriously as a real profession. After all, look at what campaigns like 1-800-LAWYERS (“Had an accident? You could be entitled to big money. Our attorneys are standing by.”) have done for consumers’ respect of the legal profession.

The reality is that advisors, even those who don’t admit it, put a marketing strategy into effect every day. The problem arises because they never take the time to think about what they’re doing, with the result that many don’t do a very good job of it.

The biggest contributor to this negative attitude toward marketing is a serious misunderstanding of what marketing really is. Sometime in the consumer product-obsessed 1980s or ’90s, marketing became synonymous in the collective consciousness with sales, and not just with sales, but with a sneaky type of selling that relied on tricks to get consumers to buy things they didn’t really want or need.

But marketing isn’t only about sales, although it obviously can be used as a sales tool. Marketing is about having a message and delivering that message to a specific targeted audience. It is—to use a somewhat clichéd term that’s nevertheless accurate—about building a brand. An advisor who says he doesn’t have a marketing plan because he gets enough client referrals already is delivering a message about his firm.

If that advisor thought it through, however, the message wouldn’t be, “I’ve got enough business as it is, thank you very much,” but “I’m always looking to bring on new clients that meet a certain profile. Do you know anyone like that?”

“Referrals are a tough issue and take a lot of work,” observes Dave Welling, Schwab Institutional’s VP of marketing and advisor business development. “It begins with an advisor getting their story down, meaning the story of who their firm is, what they do, how they do it, and the kinds of clients they serve. They need to be bulletproof on that and they need to be consistent across the multiple professionals in the firm that are saying it. That’s hard work—harder than it might seem. Some people call it the ‘unique value proposition.’”

If an advisor doesn’t think about her firm’s brand message, she may not be delivering the message she intends nor reaching the audience she seeks. If existing clients never see any proactive efforts to market the firm, they may be reluctant to refer high-net-worth associates or family members because they’ve never seen any sign or interest by the firm in that direction. So while passive referrals may bring in new clients, they may not be the types of clients the advisor is seeking.

Another common marketing misunderstanding is that marketing is only for big firms that have the staffs and budgets to do it right. Regardless of size, advisory firms can use a well-thought out, conscious marketing strategy to help grow their businesses at the right pace.

“Larger firms have more scale, but referral strategies are hand-to-hand-combat strategies,” says Welling. “I think smaller firms can engage very effectively and efficiently through mining client referrals and developing centers of influence. I don’t think smaller firms are disadvantaged, because a successful marketing strategy is so people intensive. Where smaller firms can be discouraged or distracted is that they think they need big marketing budgets to market their firms’ capabilities, but the biggest asset they have is their existing client base and [those clients’] willingness to refer.”


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Speaking Out