There is a “mismatch” between financial advisors’ marketing tactics and consumer preferences as firms continue to underuse digital marketing to find new clients while relying too heavily on referrals, according to the findings of a new Ficomm Partners research study.
The latest study builds on what a July consumer insights study by Ficomm found: Of 1,107 financial advice buyers surveyed, just 29% said they required a referral to choose an advisor.
According to the new, December study conducted by Ficomm, although 45% of investors said they selected their advisors through digital marketing, only 29% of firms prioritized digital marketing as a client acquisition strategy.
Forty-seven percent of the 437 financial advisory firms surveyed at the end of December depended mainly on referrals for new clients, according to the Great Marketing Mismatch: 2024 Financial Advisor Growth Marketing Study.
“The main takeaway is that after surveying financial advisory firms on how they market themselves, there’s a significant disconnect between financial advisors’ marketing strategies and investor preferences,” according to Ficomm.
The new “report outlines a roadmap for organic growth, emphasizing actionable steps including the elevation of digital presence, diversifying lead sources and empowering advisors to align their marketing efforts to the prospect journey,” the firm said.
“Referrals will always be an important channel for growth,” according to Meg Carpenter, Ficomm CEO and Co-Founder. But she said: “As the consumer’s buying practices change, financial advisory firms must adapt by integrating strategies that meet consumers where they are.”
“Advisory firms can continue to maximize their referrals from clients and COIs while also diversifying their lead sources to focus on their future ideal client,” said Carpenter. “The key is a documented marketing strategy that allocates tactics and resources appropriately for your growth goals.”
“We know that while many advisors may believe they are doing the things we’re recommending, the discipline and depth by which advisors do these things has a significant impact on the outcome,” according to the report. “Our recommendations are where advisors need to start if they aren’t meeting their growth goal.”
The median organic growth for all firms in 2023 was 4.9%, Ficomm said.
Among the top-performing firms, organic growth was 12.2%.
But, among the top-performing firms, organic growth was 12.2%, with 2.4x new assets generated from new clients, 4.8x more assets generated from existing clients, and 19% higher marketing spend than the average firm, Ficomm noted.
Top-performing firms are also 50% more likely to have a documented strategy, 40% more likely to have a documented client value proposition, and 30% more likely to have a documented ideal client persona, according to Ficomm.
Growth Recommendations
“How can smart, growth-focused advisory firms flip the odds in their favor for growth?” the report asked, answering: “With a strategy-first approach that builds on what works for ideal clients and prioritizes a diverse set of lead sources.”
Advisory firms seeking organic growth, typically first add new digital marketing channels, especially since research shows consumers choose advisors based on digital marketing, according to the report. But attempts of advisory firms “often fail and growth leaders are left scratching their heads as to what went wrong.”
The report said the usual culprit is “closer-to-home strategic infrastructure that needs attention,” and it sets out steps to organic growth, including advisors knowing who their best clients are, documenting their strategy, elevating their digital experiences in meaningful ways, diversifying their lead sources and empowering advisors to become individual growth channels.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
