Financial advisors surveyed for this year’s Dealers’ Report Card appeared to have conflicting feelings when rating their firms in three marketing-related categories.
That’s because advisors consider the efforts or services that their firm provides in these categories to be among the least important to their businesses. At the same time, advisors aren’t particularly pleased with their firm’s performance in these areas. This conflict suggests that advisors either don’t care what’s available and, thus, never rely on these services or that advisors have lost interest in these categories because the firms simply aren’t doing a good job.
The conflict is revealed when looking at the overall average performance ratings that advisors gave the dealers – the lowest in the Report Card – vs the overall average importance ratings given in the “firm’s consumer advertising” (6.3 in performance vs 6.5 in importance), “firm’s marketing support for advisor’s practice” (6.8 vs. 6.7) and “support for using social media” (6.4 vs 5.6) categories.
Ultimately, advisors are skeptical about whether consumer advertising, marketing and social media efforts benefit their independent practices. Although most advisors were insistent that building relationships and client referrals is the tried-and-true method of building a successful advisory business, other advisors acknowledged the added value of brand recognition and visibility in both the community and online.
This theme is evident in the consumer advertising category, especially among advisors with Mississauga, Ont.-based Investment Planning Counsel Inc. (IPC), who rated their firm’s performance the lowest in the category, at 4.2, down from 4.9 last year. The reasons vary, with several IPC advisors noting that ad campaigns are rare and they haven’t seen results because of them.
Many advisors, however, just don’t see the value of such campaigns. As an IPC advisor from Ontario says: “I don’t want more advertising. People aren’t investing with IPC; they don’t need a level of trust with IPC. They’re dealing with me; they’re investing with me.”
Although many advisors don’t see immediate results from ad campaigns, lack of brand recognition among clients was a concern. Says an advisor in Ontario with Lévis, Que.-based Desjardins Financial Security Independent Network: “[Advertising] is very poor. It’d be nice to know people that know who we are and what we do. People call me up looking for car insurance.”
Having that brand recognition can elicit pride among advisors, as was the case with many who ply their trade with Toronto-based Assante Wealth Management (Canada) Ltd. “Branding drives our individual businesses,” says an Assante advisor in Atlantic Canada. “There is instant respect that comes with our brand, and this is very important to high net-worth clients.”
Assante, which places significant focus on advertising to clients, received the highest performance rating in the consumer advertising category, at 7.7, up from 7.2 in 2013. Assante advisors praised their firm’s advertising efforts at both the national and local levels. In particular, advisors pointed out that this advertising has led to the creation of new client relationships while helping to keep existing clients on board. (Incidentally, Assante advisors rated the category at 7.2 in importance, notably higher than the overall average importance rating for the category.)
Much like for consumer advertising, there were advisor complaints about and disinterest in their firm’s marketing support, particularly because of issues related to getting approval from compliance. As an advisor in Ontario with Richmond Hill, Ont.-based Global Maxfin Investments Inc. says: “Getting ads through compliance is a nightmare. It takes forever.”
On the other hand, advisors with Winnipeg-based Investor’s Group Inc. commended their firm’s comprehensive, tech-savvy and personalized approach to marketing support. Investors Group advisors rated this category at 8.4 in importance and their firm’s efforts at 8.2, which reveals that advisors value the marketing support they receive if it’s effective.
“We have great material, and a ton of it is free,” says an Investors Group advisor in Ontario. “They’ve taken it to a whole other level by tying in our contact-management system.”
A colleague in the same province adds: “The tools we have access to are almost unlimited.”
“We have an entire marketing team that’s in constant communication [with advisors] to make sure the tools and materials are tailored to suit their needs,” says Todd Asman, Investors Group’s senior vice president of products and financial planning. “But [the program] also is designed so [advisors] don’t have to reinvent the wheel and they can leverage quality, approved material for their clients as efficiently and quickly as possible.”
Social media, the newest platform on the marketing-related landscape, is slowly being recognized as a tool that can help advisors build and maintain their relationships with clients. However, much of the financial services sector has been slow to jump on board. And advisors resistant to using social media often complain of strict regulations with compliance or identify themselves and their clients as belonging to an aging demographic that’s not interested in communicating via this method.
“It’s not very important to me,” says an advisor in Ontario with Montreal-based Peak Financial Group. “It’s more about face-to-face time with clients.”
Other advisors, however, are looking to social media to expand their approach in promoting and building their practices. “In this business, you have to look at your clients’ children if you want to hold onto your clients’ capital,” says an advisor in Ontario with Markham, Ont.-based Worldsource Wealth Management Inc. about the importance of being on social media.
“For junior advisors,” adds a Desjardins advisor in Ontario, “social media really helps to build and keep this business going.”
Overall, most advisors are dismissive of social media, saying it’s referrals that help them connect with prospective clients.
However, Meredith Malloch, vice president of marketing with IPC, suggests referrals and social media may not be so different after all: “In the business of financial advice, there are no marketing tactics more powerful than networking and client referrals. That’s why social media plays such an important role in today’s marketing mix. It’s today’s ‘word of mouth’ channel of communication.”
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