Financial advisors may be busy helping clients achieve their long-term financial goals day to day, but planning for the future of their firms is just as important to ensuring their long-term success. Without doing so, financial advisors can get stuck in a rut that makes it difficult to grow revenue and expand the business over time. Without growth, old clients that peel away are not replaced, and business is lost to competitors.
These are five key growth strategies you can use to help ensure a successful future for your financial advisory firm.
Key Takeaways
- Like any business, a financial advisor needs to keep growing their client base to stay ahead.
- Without growth, advisors may also fall into a rut and lose their passion for the job.
- Many advisors find greater success by carving a niche that fills a market need.
- Building customer relationships is good for retaining a loyal customer base and leads to referrals that expand your business.
1. Carve Out a Niche
Many financial advisory firms provide their clients with a broad array of services to address the largest possible market. While this strategy effectively makes almost anyone a potential client, you’re competing with every other financial advisory firm with very little differentiation.
Becoming an expert in a niche market—such as serving retired athletes or the tech community—is often a better approach. “Identify a niche early in your career and become known for it,” suggested Ashley Folkes, a financial advisor in Hoover, Alabama. “Some of the most successful advisors specialize in specific strategies or planning techniques.”
David Flores Wilson, a certified financial planner at Sincerus Advisory in New York City, agreed but noted the strategy’s risks. “Going all in on a niche can backfire if you don’t have sustained passion for that niche down the line,” he said. “Moreover, your niche could be less favorable during certain time periods. For example, focusing on pre-IPO tech startup executives was very lucrative a few years ago but is likely less profitable in the current market.”
Nevertheless, by developing domain expertise in the right niche for you, you can more easily differentiate yourself from others, face less competition, command greater loyalty, and potentially justify higher fees.
There’s another benefit, Folkes said. “Prospecting can be challenging, but being recognized as the best in a particular area will attract prospects to you.”
2. Build Great Customer Relationships
As the chart below shows, most advisors find much of their business through client referrals. Yet many firms are content delivering standard services and reactively waiting for them. Over time, this can lead to other advisors cannibalizing your client base.
By going above and beyond expectations, your clients are more likely to become brand ambassadors for your firm and offer unsolicited introductions. Carla T. Adams, the founder of Ametrine Wealth and certified financial planner, said she works hard to help her clients see working with her as more than a “transactional relationship.”
When starting off with clients, she said, “I like to set the tone for our relationship going forward” by putting “the client at ease and letting them know that their goals and dreams are important to me.” Adam’s quite literal about making clients feel at home. “For clients who live locally, I like to meet them at their homes, at least in the beginning, if they are comfortable. I can quickly notice a change in comfort level when I meet clients in their own homes versus in an office or virtually.”
3. Don’t Compromise on Price
Price is a contentious issue when running just about any business, particularly businesses where clients have many choices. In the financial industry, many advisors are concerned about raising prices for long-term clients despite adding new services over time that justify those higher prices.
By clearly identifying how you’re helping clients achieve their long-term goals, price shopping becomes more difficult for them, and there’s less client backlash from raising prices. The key is highlighting how your firm goes above and beyond typical services and achieves greater long-term value for them.
4. Grow the Firm’s Branding
Many financial advisors working with smaller firms tend to be too laid back about their branding. Nevertheless, a financial advisor with an outdated LinkedIn profile could be sending the wrong message to clients by failing to indicate that they’re working with a given financial advisory firm.
By keeping websites, social media profiles, and other parts of your digital presence up-to-date and consistent, clients can be more confident that your advice is up to date. It’s true that you didn’t get into the business to design a social media presence, but becoming an advisor means maintaining a brand for yourself.
Ways to build a brand include hosting an informative blog or posting educational content to media channels like YouTube, which can also help grow an audience and brand awareness over time. Something to remember is that a brand represents you—you’re not all financial advisors everywhere. Don’t be afraid to have a (professional) personality that shines through your materials.
That’s why Wilson suggests advisors “build a practice with strategies and techniques that suit their values, skills, and personality.” Doing so will keep you far more motivated than pretending to be something you’re not. “Whether it’s writing content, personal networking, podcasting, digital marketing, or other avenues, what’s most effective is the strategy you enjoy most since that’s the strategy that you’ll put the most hours into,” he said.
5. Expand Your Service Offerings
As client expectations evolve, financial advisors are adapting to meet the growing expectations of clients. “Clients increasingly are looking for one place to handle everything, so being capable of offering tax and estate planning is imperative,” said Brian M. Schmehil, managing director of wealth management at the Mather Group in Chicago, Illinois.
You might consider expanding your services beyond traditional investment advice to stay competitive and attract a broader client base. One strategy is to provide comprehensive financial planning that addresses various aspects of a client’s financial life, such as tax planning, estate planning, retirement planning, and insurance advice. By offering a holistic approach, you can make yourself a one-stop shop for your clients’ financial needs.
You don’t need to learn very different fields in finance suddenly. Instead, you can use strategic partnerships with other professionals, such as accountants, attorneys, and real estate agents, to broaden your service offerings. Partnering with an accountant can improve your ability to offer in-depth tax planning while working with an attorney can strengthen your estate planning services. These partnerships broaden your service offerings and create a network of referral partners who can help you attract new clients.
How Much Do Financial Advisors Make?
The median income for personal financial advisors is $99,580, according to the Bureau of Labor Statistics (as of May 2024).
What Is the Job Growth for Financial Advisors?
The expected job growth for financial advisors is expected to be about 11% from 2024 to 2031. This underestimates, though, the jobs expected to be available. About four in 10 advisors are expecting to retire in the next decade, creating openings beyond the additional jobs created in the sector.
How Can I Build a Client Base As a Financial Advisor?
The best ways to grow your client roster as a financial advisor include getting involved in your community, targeting underserved groups, and networking.
The Bottom Line
Expanding your clientele as a financial advisor requires different approaches that go beyond traditional investment advice. By offering a more comprehensive suite of services, leveraging strategic partnerships, specializing in niche markets, and focusing on client relationships, you can meet the diverse needs of your clients and differentiate yourself in a competitive market.
In an evolving industry, staying adaptable and continuously improving your service offerings is key to long-term success and growth in your practice.
