F2 Strategy: Advisors Must Improve Marketing To Achieve Organic Growth

A New F2 Strategy Report Says Advisory Firms Should Modernize Their Marketing Initiatives Using Technology.
Doug Fritz, CEO and Co-Founder, and Liz Fritz, Co-Founder, F2 Strategy
Doug Fritz, CEO and Co-Founder, and Liz Fritz, Co-Founder, F2 Strategy

There is a major “disconnect” between marketing and technology at many advisory firms that is slowing their organic growth rates, according to the findings of a new survey trend report, released Thursday by F2 Strategy.

That gap is preventing those firms from running the sort of streamlined, personalized marketing campaigns that the research firm says are important for enhancing engagement and relationships, and is ultimately hindering their growth.

“Reversing this course could help them increase their organic growth rate and streamline the tools and processes they use to achieve their goals,” the report says.

“When wealth management firms understand how to execute marketing tactics to achieve their organic growth goals, they can identify new efficiencies and modernize their strategies through marketing technology,” according to the report.

The report is based on the responses to a survey that F2 conducted in April. Responses came from 37 RIA, wealth management and asset management firms that collectively represent $2 trillion in client assets, according to F2.

Key trends identified in F2’s data included a decline in organic growth rates since 2021 and an ongoing heavy reliance on word-of-mouth marketing for referrals over automated messaging.

Advisory firms’ organic growth rate was 8.81% in 2023, after coming in at 8.86% in 2022 and 9.29% in 2021, the report says.

There is, however, growing interest among the firms in hiring marketing executives to drive new growth, with more than a third of responding firms either already hiring or planning to hire for this role, according to F2.

“M&A has been strong for the past five years, but this type of growth as the only form of growth is unsustainable for firms over the long term, particularly as they compete to win clients in the generational wealth transfer, and more firms are turning to organic growth strategies” by adding clients over inorganic growth strategies including mergers and acquisitions, the report says.

Advisory firms must “balance both types of growth,” according to F2.

However, advisory firms must “balance both types of growth to maintain an overall stable growth rate year after year,” according to F2.

Organic Growth Objectives

To reverse the declining organic growth rate, advisory firm “leadership should develop organic growth objectives and align resources appropriately to achieve those objectives,” F2 suggested.

The firms should “consider forming an internal Marketing Committee, comprised of marketing AND technology professionals to help build an organic growth workflow [because] bringing everyone to the table increases the likelihood of success,” the report says.

Only 67% of wealth management firms that responded to the survey now have an organic growth goal for 2024, the report says. “The rest, it stands to reason, plan to depend solely on inorganic growth strategies.”

Sifting Through Tools

Advisory firms need to “invest in technology and training to better utilize marketing automation and digital marketing tools such as social media and podcasting to provide balance to their word-of-mouth campaigns,” according to F2.

Firms often use different tools for client management, content management, marketing optimization and prospecting, F2 pointed out. But that “wide array of tools makes it harder for firms to build a harmonious marketing-technology automation strategy that drives engagement and firm growth,” F2 warned.

These tools are treated just like any other technology tools at the firms, which has created a problematic disconnect where marketing often operates independently from the technology designed to support it, preventing the firm from reaching its full potential to accelerate growth, according to the report. ‍

Advisory firms must “evaluate their marketing technology tools to decide which work and which just take up space,” the report says.

Advisory firms must “evaluate their marketing technology tools to decide which work and which just take up space and identify places where they can combine functions into a single tool,” the report says. “Additionally, firms must establish true integration where all stakeholders – from tech to marketing – collaborate under a unified strategy to truly advance a firm’s goals.”

These firms should “consider hiring marketing professionals internally to align the firm’s overall business plan with a relevant marketing plan,” F2 suggested.

They should also consider how third-party resources could help them align their marketing tactics to business plans.

Advisory firms should also “consider including marketing tips and advice to existing sales meetings to ignite interest in organic growth,” F2 suggested.

Jeff Berman, Contributing Editor & Reporter at Wealth Solutions Report, can be reached at jberman@wealthsolutionsreport.com.

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