Top advisories recognize the importance of exhaustive sales and marketing. Marketing generates prospects for advisors, but it takes sales to close the deals. Support of this view is in Tiburon Strategic Advisors' contention that 83% of advisors with yearly revenue north of $1 million have both aspects of client acquisition firmly in place.

Consumer Wealth, Target Markets & Marketing Strategies a new report by Tiburon, a San Francisco Bay area research consultancy, discusses four approaches to marketing -- referrals, advertising, target marketing and direct marketing -- that help advisors bring in new business.

Tiburon probes the advantages of each approach. Full-service brokers receive 40% of their new clients from passive client referrals, 15% from active referrals. Another 22% come from referrals by other professionals in the field such as CPAs, attorneys and fellow brokers while 20% come from "proactive" marketing.

Referrals

More than half of fee-only investment advisors' new clients come from "passive" referrals from existing clients while 43% come from more pointed "proactive" client referrals. For independent brokers, 36% of new clients come from passive referrals, and 20% from proactive referrals.

Tiburon also puts into focus the importance of peer referrals into focus. Most accountants and lawyers -- 93% and 86% respectively -- make client referrals to financial advisors in the course of a year.

Service agencies like Charles Schwab, Fidelity and TD Ameritrade clearing firms like Pershing and Goldman Sachs are another excellent source of referrals. That said, participation in such programs is frequently scant. Only around 300 of the 5,000 advisors who use Schwab are enrolled in its referral program.

When it comes to advertising, the Tiburon report suggests that it be used more for visibility and positioning than for direct client acquisition. The most effective advertising strategies appeal the emotions. Lately -- given recent corporate scandals -- advertising that undercuts perceptions of greed have done well.

A soundly targeted marketing strategy can increase prospect conversion, enhance a firm's reputation and improve financial efficiency. It can also help advisors attract wealthier clients. "Non-specialized firms have less than 10% of their assets from clients with greater than $1 million with them whereas firms focused on target marketing have greater than 20% of their assets from these large clients," according to the Tiburon report.

But for marketing to be really effective, firms must be clear about the market niche they are looking to serve by preparing themselves to meet challenges that clients in that niche experience. Such target marketing is also best complemented by advertising, press relations and communication that actually reaches the niche in question -- and when it gets to them, actually speaks to them effectively.

The Tiburon report also touches on the use of seminars and direct marketing. Except in rare cases, it turns out, direct marketing is no way to reach affluent clients. Seminars work much better, with an impressive 45% of event attendees requesting follow-up meetings.

Follow this link to find out more about Consumer Wealth, Target Markets & Marketing Strategies. -FWR

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