In 2018, volatility in the stock market returned with a vengeance, catching most investors and many advisors off guard. Advisors, who have experienced at least a couple of market cycles, understand that volatility is normal and market pullbacks are temporary, which is why they advise their clients to exercise patience and discipline in staying the course with their long-term strategies. Yet, the record outflows from equity funds over the last year is a clear indication that scared investors may feel otherwise, with many abandoning their strategies and some even abandoning their advisors in search of better financial risk management strategies.
While it’s not uncommon for clients to run scared – after all, there are few greater fears than the fear of losing money – many do so even when they know that pulling their money from the market may be a big mistake. At least, that’s what their advisors have preached to them. Selling at the wrong time is often costlier than riding out a passing storm because most investors don’t know when it’s time to get back in. Some may never get back in, which could seal the fate of their financial future.
Advisors not Following Their Own Advice
Interestingly, during tough times, many financial advisors don’t always follow their own advice – to exercise patience and discipline, to stay the course – until the storm passes. Instead of forging ahead with their growth strategies, many look to cost-cutting in anticipation of falling revenues. And, as is the case with other industries, one of the first expenses on the chopping block is marketing. While that may seem like a natural tendency, it is often a short-term path that leads to poor long-term results. A tough lesson learned by businesses in any industry is you can’t save your way to prosperity.
Drawn into their own world of restless clients and shaky revenues, most advisors may not realize that their competition is struggling with the same afflictions, which suggests that it is not a time to pull back. Rather, it is an opportunity to truly differentiate yourself, get your story heard and gain ground against other advisors. It’s an opportunity to lock down your existing clients and create opportunities to attract dissatisfied clients from other advisors.
Now is not the Time for Advisors to Cut Back on Their Marketing – Learn What to do to stay on demand Click To Tweet
How To Market Your Advisory Practice During Market Pullbacks?
Warren Buffett suggests that investors should be “greedy when others are fearful.” In marketing parlance, advisors with a good story to tell should be aggressive when others are reeling. At times like these, there is a lot of money in motion that won’t find its way to you through inbound sales.
If you have been executing a marketing and communications plan, now is not the time to stop. If you have been putting off implementing a marketing strategy, now is the time to move forward. While cost-cutting may seem like the easier path to protecting profits in the short-term, the right marketing strategy can still generate the best ROI for sustainable profits in the long term. It’s time to refocus your resources on the marketing and communications efforts that produce the biggest bang for your buck.
Here are three areas of focus that can keep you in the game
Fortify Your Communications Strategy
If you’ve lost any clients, there is good chance communications, or lack thereof, was at least partially responsible. One study found that high net worth clients are more concerned with receiving clear, timely communication than with investment performance.
Client relationships built around strong communications are more likely to survive adverse market conditions. The key to effective communications is content. It should be relevant, timely, and when possible, personalized. Equally important, it should be delivered based on your clients’ preferences for communication, whether verbally, by text or email, through social media, or some combination.
Narrow Your Focus
Kudos to you if you are willing to boost your marketing efforts. However, this is not a time to cast a wider net to find new clients. By doing so, you become less differentiated, less unique, and to the clients you really want to attract, less appealing. A wider net may pull in more prospects, but it won’t result in more clients and it will cost you more in valuable time and resources to cull through a higher number of prospects to find the few clients you want to work with.
Instead, narrow your focus to match your strengths to the group of prospects who are looking for those strengths. The time you save on meeting with unqualified prospects can be spent winning over the clients you really want. Sharpen your message to differentiate yourself further in your niche.
Get Proactive with Referral Marketing
While most advisors gladly accept referrals, many don’t proactively pursue them, choosing instead a more passive approach. Because the passive approach (waiting until someone offers a referral) doesn’t do much for organic growth, many advisors don’t and shouldn’t rely on them. However, advisors with a proactive strategy tend to find their best clients through referrals. The key is making yourself more referable by truly differentiating yourself and delivering on your value proposition with your clients.
Advisors who have the most success with referral marketing work primarily with their clients’ other advisors – attorney, CPA or insurance agent – to develop them as key centers-of-influence. Not surprisingly, with so many clients on the move, these centers-of-influence are interested in helping their clients find a home.