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10 Things Financial Advisors Can Do to Keep Up With Competition

In order for your financial advisor practice to succeed, you need to have a great game plan. Financial advisors who are just starting out not only have to face stiff competition from well-established firms, but also new technology developments such as robo-advisors which are much cheaper and easier to set up. 

Here are 10 things you can start doing today to be able to keep up with the times and make your financial advisor firm more successful.

1. Figure Out What The Market Wants

You can’t build demand for your services if you don’t understand what people in your target market are looking for. Before you can offer a solution, you have to identify what people’s current pain points are. 

Every time you talk to a new prospect, try to identify common issues that your ideal clients have difficulty dealing with. Pay close attention to what people are saying and gather as much information as you can so you can develop a streamlined financial strategy that will solve most of your target market’s problems..

2. Find a Niche and Specialize

Most financial advisors who are just starting out try to cast as wide a net as possible in hopes of getting more people to sign up with them. They’ll often use a generic pitch that tries to appeal to everyone, but isn’t really great at evoking the right emotions and results in low conversion rates.

It’s quite understandable if you have to resort to these sales and marketing tactics if you’re just starting out. But after a few weeks or months of talking to different prospects, you should already be able to identify a specific niche that you can specialize in. 

Once you’ve picked your niche, you have to be ready to pivot your branding and financial planning strategy to address that specific market’s every concern. For example, millennials and high-net-worth individuals have very different perspectives when it comes to their financial planning and wealth management. 

When you focus on just one niche, you’ll become an expert at handling their financial strategy. You’ll reach a point where you’ve pretty much encountered every possible scenario, and will have a tailored financial plan ready to go just because you’ve dealt with it dozens of times before. 

People in the community and your professional network will start seeing you as an authority figure in your niche and you’ll eventually be able to generate more business through referrals and word of mouth.

3. Develop a Unique Value Proposition

Just because you’ve already decided to focus on a niche, it doesn’t mean that people in your target market will pay attention. You have to carefully develop your branding so that it clearly reflects your company’s values and mission. 

If you find the right words, your marketing campaigns can cut through all the noise that people are regularly exposed to and make your audience pay attention to what you’re offering. 

Your unique value proposition has to be more than skin deep. Even if you can get them through the door through your marketing, your prospects need to be able to see that you’re truly dedicated to delivering on your promises and that your firm is structured to do so.

4. Get Your Name Out There

No matter how great your branding or financial planning strategy is, nobody will come knocking at your door if they don’t know you exist. During the first few years of your firm, you have to work extra hard to build up awareness for your brand both online and on the ground. 

You need an outstanding website that’s on par, if not better, than your competitors’. Your website is the foundation of your digital marketing and is the online face of your business, so you have to make sure it looks professional and reflects your brand accurately. 

Make sure you’ve got updated profiles on all the major social media platforms like Facebook, Twitter and LinkedIn. Sign up for different online directories like Google My Business and Yelp, as well as other sites that are relevant to your area and/or industry. All of these platforms will make your firm easily searchable and increase your brand’s visibility.

Of course, your marketing shouldn’t be isolated to the digital realm. You also need to be constantly networking with potential clients, professional groups, and local organizations so that you can generate more word of mouth for your firm.

5. Communicate Effectively

In addition to coming up with a great marketing plan, you also need to constantly be engaging with your leads and prospects. In today’s digital landscape, people expect quick response times and outstanding customer support with every business they deal with. 

If you ignore or take your time in responding to inquiries, people won’t bother waiting around and simply move on to the next available advisor. You have to treat every possible prospect as if they’re your most valued client if you want to increase your chances of getting their business. How you respond to leads and prospects reflects how you communicate with your clients. 

This is especially important when you’re dealing with public platforms like social media where the general public can easily see your people skills. How you manage your reputation online and offline is going to be a crucial part of your firm’s success. 

6. Leverage as Much Technology You Can

Many startup businesses will be tempted to pinch pennies and forego subscriptions to essential tools that can make their life easier. They assume that they can do a lot of it on their own, until they become overwhelmed with all their responsibilities. 

You don’t have to pick the most expensive plans for every piece of tech you use. You can start with basic plans or at least sign up for free trial periods so you can start learning how to use these tools to your advantage. 

You have to remember that your competitors are also using lots of different tech to automate their workflows and better serve their clientele. Don’t be afraid to check out different CRM platforms, social media tools, and financial planning software so you can find the tools that work best for you.

7. Be Flexible With Pricing Models

Unless you’ve already found a pricing model that works best for you and can sustain your business, you have to be ready to offer different options for your potential clients. Your competitors are likely going to offer just one or two options, and this may not work for a lot of people. 

In order to appeal to more potential clients and differentiate yourself from other financial advisors, you can offer several options such as:

  • Percent of AUM
  • Fee-based
  • Hourly
  • Monthly retainer

Remember that you also have to compete with robo-advisors which have very minimal investment requirements and cost significantly less than hiring an actual financial advisor. By lowering your firm’s barrier-to-entry, your prospects won’t feel as intimidated as they would when they sign up with a more established practice. Eventually, as your client base grows and your business becomes self-sustaining, you can choose the pricing models that work best for you.

8. Choose Experienced Consultants and Agencies

When you’re running a business, you can’t spread yourself too thin because it’s going to affect the quality of your work. If you don’t have any expertise in a particular field, it’s best to outsource it to a more experienced professional. Now is not the time for trial and error, and you don’t want to give people the impression that you barely know what you’re doing. 

It’s best if you can find people who have years of experience working with financial advisors so that they’ll know exactly what kind of service or product the market wants. 

For example, when you’re setting up a website or developing a digital marketing strategy, you’ll want to partner with agencies that know the financial services industry inside and out. This will guarantee at least some level of success with whatever it is that you’re trying to achieve.

9. Research Your Competition

While you want to set yourself apart from your competition, it’s always a good idea to check in on them from time to time to find out what they’re up to. There’s always going to be an opportunity to learn from their mistakes and also incorporate what they’re doing right into your own business. Using competitor research you can avoid making the same mistakes which can be extremely costly for both startups and middle-stage firms.  

10. Provide Personalized Service

Well-established firms and large financial institutions will have large teams of salespeople and junior advisors working for them and are often more concerned with their bottom line and their shareholders. As a smaller practice, you can differentiate yourself by offering personalized services that other firms and robo-advisors simply cannot provide. You can tailor your services to the needs of each client which is quite rare nowadays. 

In fact, most high net worth individuals prefer a more personal approach especially when it comes to their finances. They want bespoke services that aren’t available to everyone else and they want to work with people who will listen and do exactly what they want.

Final Thoughts

If you’re having a hard time keeping up with your competitors, you have to be open to try new things. What worked in the past won’t necessarily be effective today. Don’t be afraid to take risks and dive into previously uncharted territory. There might be huge rewards waiting at the end of the road.

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