2 Comments

Be Wary of Lead-Generation Adviser-Matching Services

Advisers looking to grow their business are always interested in finding new clients, but almost universally, advisers hate prospecting. Most of them don’t have the time, skill or interest to do the marketing on their own, which is why lead-generation services have become more popular. In fact, these services are banking on demand and specifically targeting advisers. You can find firms that will sell you prospect information in specific high-net-worth zip codes or Google and Facebook ads that will pop up on specific sites investors might be searching.

Some services take it further by promising advisers you’ll never have to prospect again. While adviser/client matching services have some differences in their business models, their core offering tends to be the same: they promise to match advisers with great quality prospects in their area who are pre-qualified and need their services. The adviser pays a fee to participate (usually a setup or onboarding fee, plus a fee for every referral the adviser receives) while the end client pays nothing.

Wow! That sounds great, doesn’t it?

You know what’s coming, don’t you?

There’s a big BUT. Like most things that seem too good to be true, there’s a catch. Let’s look at a few issues that should be considered before you sink money and time into an adviser-matching service.

Quality of Leads Generated

Where do the matching services find all these apparently great, high-quality leads? The leads come predominantly from advertising. The companies tout their multichannel approach for putting information in front of prospects, and they leverage Facebook, LinkedIn, Google organic searches and pay-per-click services, strategic partners and alliances, social media, email, custom landing pages and videos to make it all happen.

With these tools, they can target investors who are looking for information on a specific topic, such as how to leave money to children. Or they could compel a group of investors to reply to a general pitch for retirement planning or request an e-book on a topic after completing a form. While many prospects do complete such forms, they may or may not be told that a financial adviser will be contacting them afterward. Some prospects have expressed surprise when advisers reach out and say they don’t know how their name and number were obtained.

Some marketing agencies go even further by making the most of today’s sophisticated data analytics. They can cross-reference reams of data and extract candidates who might seem to fit a specific lead profile, such as being older than age 60, living in a particular town or zip code, owning a second home, driving a Mercedes-Benz and so on. These prospect pools might not have clicked directly on an ad or requested information, they have simply qualified as lead because they visited a financial planning site or clicked to run a retirement income calculator.

A One-Size-Fits-All Approach

All these services create pay-to-play scenarios, meaning that only advisers who sign up and pay will receive referrals. So, even though the services promise to match clients with advisers who are a great fit, the premise is flawed. A questionnaire for an investor looking for an adviser is likely to ask only the most basic questions to assess needs (e.g., are taxes important?), rely on investors to self-report their income and assets and make no distinctions for adviser experience and education. So, an adviser with a CFP®, AIF®, CFA®, CPA and 25 years of experience will be presented on an equal footing with a rookie adviser holding only a FINRA Series 7 securities registration. Since the job of lead-generation services is to spread the leads around to all advisers, everyone is treated the same—even though that may not be best for the paying adviser or the prospective client. Advisers receive a brief form with the name, phone number, email and total assets for each prospect, and then it’s up to them to follow up.

Compliance Approval

This is tricky territory indeed, and every firm is different. Depending on how the particular lead-generation service is structured, the SEC will likely consider the service to constitute a solicitor arrangement under Advisers Act Rule 206(4)-3. That’s because the SEC defines a “solicitor” broadly as “any person who, directly or indirectly, solicits any client for, or refers any client to, an investment adviser.” In general, the payment of compensation by advisers to for-profit lead-generation or adviser-matching services may be done only in strict compliance with the solicitation rule. And since it is the adviser making the payment who falls squarely under the jurisdiction of the SEC, it is the adviser who will be held accountable for failure to comply with the rule. Given that, before you spend money or time with any of the services out there, be sure to check with your compliance department and see if it’s allowed.

Are the Services Effective?

According to the marketing and websites of the lead-generation services, absolutely! And there likely is a degree of success, or these companies would quickly close doors.

Caveat emptor applies, though. First, carefully consider what you are trying to do with your business and see if these services make sense. Second, make sure you understand the following:

  • Cost: The services can be expensive. For most advisers, the up-front costs and costs per lead could be better spent on other marketing initiatives that would give them more control and better results.
  • Limitations: Geographic location seems to be the biggest factor in assigning advisers to clients, not experience or designations. The heavy zip code weighting seems at odds with the ability of more targeted technological capabilities, as well as the increased mobility of clients.
  • Missing information: Many advisers invest heavily in their learning and have earned a number of credentials and licenses. The services don’t take any of that into account when matching advisers to clients, although prospects can be influenced by reading designations on adviser profiles.
  • Lack of customization: Even though the services tout their ability at matchmaking, there’s no way for the service to get to know either the adviser or the client. Most prospects who fill out the (very basic) questionnaires might not even know their financial issues or the kinds of solutions they need, so how can they choose the adviser best qualified to help?
  • Risk of wasted time: While advisers can pay more for a lead based on the prospect’s assets, they cannot identify or choose their ideal clients. At Commonwealth, we coach advisers to try and find the right people who meet their minimums and ideal client profile. The opposite is happening with these services when the adviser agrees to follow up with all leads, whether they fit the practice or not.

Evaluate Carefully

Where do you want to spend your money, time and energy? What is best for the long-term success of your practice? In my opinion, most advisers’ time would be better spent deepening relationships with current clients, learning the best ways to ask for referrals and introductions and being highly visible in the community.

If you do want to engage in a digital strategy to find leads and prospects for your business, I suggest you check out LinkedIn first. There are plenty of resources to help you leverage the social media platform that are free, easy and put you in control of the people you contact. And that sounds like a lead-generation strategy worth trying.

Kristine_McManus_2_lg

Kristine McManus is chief business development officer, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, the nation’s largest privately held Registered Investment Adviser—independent broker/dealer. Since joining the firm in April 2014, she has been working with affiliated advisers to grow their top line through the introduction of various programs, tools and coaching. Kristine holds the Chartered Retirement Planning CounselorSM designation, a master’s degree from Pennsylvania State University, and a BFA from Adelphi University.


Leave a comment

How Financial Planners Can Make Summer Prospecting Enjoyable and Easy

The summer season sends many financial practices into the doldrums. Business-building efforts don’t stop completely, but they sure slow down. Clients might be away or not interested in coming to the office, and advisers and staff likely have days off or extended vacations booked. Summer days drift away from one to the next without much impact. Then September comes—and advisers realize the end of the year is going to arrive before they’re ready for it. And what were those business growth goals, again?

The Perfect Time to Prospect

This year, why not spend the dog days of summer building your business? Of course, have fun and enjoy some leisure time off, but also think of all the ways you can boost your firm’s visibility and attract your ideal clients. To help get you started, consider the following ideas—they will delight your community and are loaded with great prospecting opportunities.

Summer safety session. Schedule a summer safety session and invite parents and grandparents with young children. For example, a session titled “Keep the Kids Safe This Summer” could attract lots of people. For added reach—and a community event worthy of PR—invite a few guest speakers such as a pediatrician, lifeguard or water safety instructor. Whether you discuss sunburn, poison ivy, ticks or water hazards, a safety session can attract both clients and prospects. Take pictures, give small gifts of bubbles or sidewalk chalk, and you’ve got great talking points and pictures for your website and LinkedIn and Facebook pages.

Sports team sponsorship. Consider sponsoring a sports team for the summer. Think about it: your firm’s name and logo will appear on T-shirts worn by little kids trying to hit a ball off a tee or score their first goal in soccer. The pictures alone will make it worth the investment, as many towns put pictures of kids’ teams in local newspapers and on their websites. But you can do so much more:

  • Take pictures and put them on your website, with captions such as, “We’re proud to sponsor the Riverdale Green Hornets!”
  • Go to games and meet the parents and grandparents of the players.
  • Invite some of your clients to attend a game with you.
  • Sponsor a pizza party at the end of the season and mingle with the parents.
  • Bring popsicles or ice cream treats for the players and fans.

These simple activities can have a huge effect and get you talked about in the community, for very little expense.

Community events. If you’re a solo adviser or small firm, create an event for your clients that leverages a bigger event in your area. Many towns hold free summer concerts in a local park or show family movies on a big screen in a nearby field or stadium. Check out your local town’s recreation brochure or website to see what’s available, decide on a guest list and make your plans accordingly.

  • For clients with children, invite them to join you to watch family-friendly choices or the movie of the week. Tell them you’ll have blankets and refreshments ready and where you’ll be set up in the park. Bring coolers of soft drinks or ice cream novelties, have some boxes of movie candy and popcorn on hand, and you’re done!
  • For older clients, be sure you have lawn chairs available so that people will be comfortable, and bring some blankets in case the weather cools. If your town allows it, a simple wine and cheese picnic held outside while listening to music could be something your clients talk about long afterwards. And, of course, let your clients know their friends are welcome to join in the fun.

Ice cream social. Do you have a popular ice cream stand in your area? If so, invite clients to join you on a certain date and time and treat them to the ice cream of their choice. Yes, it really can be that simple! People are always looking for an excuse to get out in the summer, and who can turn down an ice cream cone? Especially one with sprinkles. Plus, you’ll be sponsoring a local business and having fun at the same time.

Putting Smiles in Your Posts

No matter what event you choose, don’t forget the power of pictures! Posting heartwarming photos of your events is an incredibly valuable way to spread your firm’s name and gain community goodwill. (Remember, you’ll need to get client approval for picture use, but most are happy to give permission.) Here are some simple ways to share the fun:

  • Post the pictures on your website, Facebook or LinkedIn page, or other social media platforms.
  • Send clients an email and attach a few pictures that they (or their children) are featured in. Your clients can post the photos to their personal Facebook pages—and hopefully mention your firm.
  • Create a collage of the pictures from your event and hang it in your reception area or conference room. This makes a great visual for prospects.

Making the Summer Sizzle

Summer can be the ideal time to plant the seeds for future growth. With some careful planning and creativity, you can turn the slow days of summer into growth momentum for your business.  Kristine_McManus_2_lg

Kristine McManus is chief business development officer, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, the nation’s largest privately held Registered Investment Adviser—independent broker/dealer. Since joining the firm in April 2014, she has been working with affiliated advisers to grow their top line through the introduction of various programs, tools and coaching. Kristine holds the Chartered Retirement Planning CounselorSM designation, a master’s degree from Pennsylvania State University, and a BFA from Adelphi University.


2 Comments

4 Steps to Redefining Your Reference Point

Most financial advisers settle into a routine after a few years in the business. However, oftentimes routines turn into ruts. Many of my clients wonder why their business is coasting along but not growing. I tell them that it may be time to take a moment to evaluate and possibly restructure their activities.

If this is happening to you, don’t be discouraged. Rather choose to redefine your reference point. Our past experiences can hold us back from future success because they may limit our confidence to try new things.

Pablo Picasso said it best when he said, “I am always doing that which I cannot do, in order that I may learn how to do it.”

The secret to redefining your reference point is to think out of the box, find someone who has done what you would like to do, learn from their example and take action.

Let’s take a deeper look at each one of these steps.

Step 1: Think Out of the Box

As with most journeys in life, the first step is always the hardest. You must ask yourself the tough questions in order to begin. Questions such as, “Where am I now? Where do I want to be? What do I need to do differently to get there?” Asking yourself these types of questions and analyzing your answers helps you to think out of the box. It encourages the mind to look for solutions.

Jeff K., a financial adviser with 28 years of experience, had been on a production plateau for year. After attending a free Adviser Solutions Mastermind Session and hearing some of the tools and resources I recommend to other advisers, he contacted me to discuss his business. This act of asking for insight was foreign to him since he had never spoken to a business consultant/coach before.

Step 2: Find a Mentor

The next step is to find a mentor who can help you determine all of the steps needed between where you are currently and where you would like to be. This can be a difficult step for many advisers especially veteran ones who may have to consider advice from others who have not been in the business as long as they have. The key is to find a mentor who has proven results and whose opinion you value.

Step 3: Learn from Their Example

In order to produce the same types of results that other successful advisers have, find out what they have done to accomplish those positive outcomes. It’s important to fully understand their step-by-step process so that you can tweak that for yourself.

Once Jeff explained his situation to me I knew we needed to map out a great prospecting campaign and since he had a large client base I explored the possibility of prospecting by asking for referrals. Over the years, he had tried numerous times to get referrals but ended up very disappointed with the results. I detailed out the process for him, we role-played the dialogue and I coached him on the reasons why a focused referral system works.

Step 4: Take Action

The most important step is to take action—without doing so everything else is just wishful thinking.

Jeff began the Adviser Solutions Client-Centered Referral Process right away and within a week he reported to me that he had received five referrals. That is more than he had gotten the entire previous year. He was so excited about it that he gave me a referral to his boss who he believed needed to hear this process and whom ended up having me teach it to his entire region.

Why Redefining Your Reference Point Works

The key to creating success is to constantly redefine your reference point because it keeps you open to exploring new ways of improving.

If this blog resonates with you and you’d like a free consultation with me, email Melissa Denham, director of client servicing for Advisor Solutions.

Dan Finley

Daniel C. Finley is the president and co-founder of Advisor Solutions, a business consulting and coaching service dedicated to helping advisers build a better business.