(seeking alpha) In an increasingly competitive market, gaining clients has become a challenge. Just look at the numbers: as of July 2018, FINRA reported 629,032 registered representatives, 3,690 representative firms, and 156,339 branch offices.
A study conducted by Data USA in 2014 estimated job growth for financial advisors of 14.9% over the next ten-year period. In fact, this expansive growth is much more than the predicted national average job growth rate of 7.4%.
There are also new financial options to compete with, like robo advisors, client portals, and self-service tools. Plus, clients possess a general distrust in financial planning after the financial crisis of 2008 — even believing that they can manage their money better than any advisor.
So the stakes are higher and the client demands are greater — and the battle to win over clients rages on.
While there isn’t a guaranteed way to the top, there are some ways that you can increase your client base and grow your profits in this challenging financial investment market.
1. Add More Service Offerings
Clients typically have many professionals working on various components of their financial wellbeing. They elect individual members to manage their financial health without coordination or teamwork. The problem? Clients financial performance doesn’t benefit from a unified, integrated approach to wealth management. Instead, they have a vague picture of their investment opportunities, along with semi-conflicting ideas from different parties — not to mention overlapping responsibilities. By consolidating financial services under one roof (wealth management, tax, insurance, estate planning, etc.) you can help your clients achieve better results more easily.
Offering more services to your clients directly benefits you: you get the opportunity to have control over more of your client’s wealth, and grow their wealth, by addressing more of their needs via integrated investing. Instead of the client’s assets being spread across various individuals managing a piece of their finances, you can personally handle more of them.
Adding capabilities related to taxes, property investment, insurance, and more helps you to better understand and guide your client’s overall financial health. Consider that only 37% of advisors offer some type of tax planning, according to a survey conducted by Financial Planning. By filling the need for a financial advisor and a CPA, you could greatly increase your service offerings and client base.
These additional service offerings on your bench could also boost your revenue. How? You could increase your advisor fees based on the services your client wants or needs from you. As an example, you could offer your financial planning services as the base and then add on extra services, like tax planning, for nominal fees.
2. Showcase Your Value Proposition
Growing your business means increasing your reach to new clients — and a saturated financial advisory services market makes this challenging. While you cannot guarantee new clients, you can make sure that clients notice you by showcasing your value proposition.
Although understanding your value proposition may initially seem like a tedious chore, asking yourself the right questions can make it easier to determine your value proposition, and thus determine what makes you unique.
Are you finding interesting opportunities that are overlooked by bigger investment firms? Are your alternative investments more exclusive than those offered by large firms? New and innovative investment opportunities can give you an edge over the “big guys” because bigger firms and broker-dealers aren’t as flexible with their investments. Oftentimes, alternative investment opportunities need to be approved in a bigger firm, and this can slow down the process — and create a missed opportunity.
Also ask yourself: Are you embracing modernization? Meeting your clients where they are — whether that’s on their mobile devices, email, or text — displays your understanding of the trends that are determining the future of the financial investment world. Digital definitely is that future: a study by McKinsey & Company found that 40–45% of affluent consumers who switched their primary wealth management firm in the last 24 months have moved to a direct, digitally-led firm.
By modernizing your approach and using new technologies, you showcase your flexibility to clients. Many financial advisors are hellbent on staying with the processes and channels they know best, and so they are mired because of their staunch beliefs. By exercising an understanding of client and market trends, you can shine above the competition.
3. Think Like a Financial Advisor
It’s a jarring statement that sounds contrary to your role. But consider this: If you want to grow your book of business, you should alter your perspective and think like a business owner.
You may be a great financial advisor, but that doesn’t guarantee success as a business owner. In fact, many advisors who start their own firms revert to joining a larger organization because business processes, daily operations, and compliance issues put them in the weeds — and take them away from the financial advising role that is most important to their success.
If you are an advisor who owns a firm or plans on starting one, consider the advantages that a firm could offer you. Additional marketing resources, more investment opportunities, and core business processes are only some of the basic (yet important) perks. Yet, probably the biggest benefit of a firm is that you get to focus on your clients and let someone else handle the operations and compliance components of the business.
4. Grow From Within
Great culture drives a great business. The idea of company culture goes way beyond the office perks and company happy hours often touted by the startup community. Instead, today’s modern culture is built on a solid mission statement, values, goals, and a set of company ethics that outlines how and why they do business. So how do you put this into action? Through emotional intelligence.
Emotional intelligence is a concept in psychology that entails identifying and managing your emotions as well as the emotions of others. Despite its foundation in psychology, emotional intelligence also has its place in business because it helps to attract and retain new clients.
By exercising emotional intelligence, you can understand your clients on their level: their challenges, roadblocks, weaknesses, and strengths. This emotional intelligence adds a human element to your service model, which also resonates with customers. Now more than ever, customers are seeking out brands and businesses that echo their values; and when they find these businesses, customers give them their trust and support.
Not only does emotional intelligence bolster your external clients, it supports your internal business structure as well. Using emotional intelligence as part of your business processes aids in employee development, fair internal processes, and strategic goal setting. By knowing who your customer is and what they want, you can work to internally meet these demands — which paves the way forward for company growth and continued business success.
Despite heavy competition and a seemingly crowded industry, there are still some ways that you can ensure increased revenue and continual incoming business. Choosing to add more service options, explaining your value proposition, acting as a business owner, and embracing internal growth are all great starting points toward better business and better ROI.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
