How to get clients as a financial advisor in 2021

Figuring out how to get clients as a financial advisor isn’t easy. The industry standbys — referrals, advertising, direct mail, and cold calls — are either costly or time-intensive. The old way of doing things can become a major hindrance to your firm’s scalability. 

As your client base grows, advisors tend to have less and less time to devote to inefficient growth activities that demand ever more of their attention. Consider the ongoing problem of client acquisition costs (CAC) that are startlingly high in the financial services industry.  

High client acquisition costs in financial services

A recent Kitces Research report of 800+ financial advisors found that the average total client acquisition cost (CAC) for a new client is $3,119. 

Substantial per-client costs become a challenge when they equal or exceed the profit generated by those clients over the first few years. A troublesome “J-Curve” of client profitability begins to take shape, in which it takes several years before the aggregate profitability of a new client is a net positive. This can make it difficult to absorb a large number of new clients at once.

Less than a quarter of that $3,119 figure, however, is in hard costs like Google AdWords fees and promotional materials. A huge $2,600 slice represents the cost of time spent by the financial advisor themselves. This should be no surprise in an industry that relies heavily on referrals, cold calls, dinner presentations, and other methods that take 1:1 investment of the advisor’s time. 

The issue with a 1:1 methodology is clear — the more you grow, the less time you have to devote to converting each individual client.

Additional challenges with client acquisition in 2021

Financial advisors face many obstacles to business growth amidst evolving demographics, economics, and technology. At least four major hurdles stand out in 2021 and beyond:

• Differentiation in an increasingly crowded market (with more than 9,000 investment startups and $89 trillion assets under management worldwide in 2020)
• Competition from robo-advisors, fintech startups and micro-investment apps
• The challenge of marketing in a regulated market (as lamented by 78% of digital marketing executives in wealth management)
• Increasing client preference for instant, digital and self-help solutions

In addition, many of today’s most commonly used marketing strategies — social media, blogging, and client dinner events — are actually among the least efficient for financial advisor client acquisition, according to the same Kitces report referenced above.

So what can you do that will promote cost-effective growth?

Narrow your focus and your target audience

It’s difficult to succeed as a generalist in a competitive market. Focusing on one segment of the market (e.g. retirement savings, peak career wealth creation, estate planning) positions you as a specialized expert, makes you more memorable and helps to lower CAC, all at once. Figure out which market segment you can best serve — or that you feel is currently underserved — and help your target clients to achieve success.

Financial education is scalable, efficient, and effective

You’ll also need to learn how to get clients as a financial advisor without investing an exorbitant amount of your time. The research shows that educational seminars and courses stand among the most cost-effective (based on actual CAC) and the most cost-efficient (considering revenue generated vs. CAC) methods for bringing in new clients. The opportunity is there to reduce the overall cost of marketing for new clients, improve profitability and enable scalable growth. 

The scalability math works in your favor when you’re engaging self-selected prospects 30:1 in a classroom setting vs. 1:1 in a sales presentation. The attendees in your webinar, virtual course, or seminar are also essentially pre-qualified since you already know they’re in the market for financial advice.

How to get clients as a financial advisor with FMT

There’s no need to reinvent the wheel. Fiduciary advisors are natural teachers. What you need is a turnkey solution to roll out a scalable financial education program without the immense up-front costs, time and expertise of creating it from scratch.

The end-to-end FMT platform gives you a cost-effective and convenient way to deliver high-value financial education and attract exceptionally qualified, motivated prospects. With FMT, you get:

• Proven, FINRA-reviewed course design
• Engaging, ready-made materials and comprehensive attendee workbooks
• Concierge instructor training, conversion coaching and RSVP support
• Marketing strategy, planning & guidance
• Options for in-person or online course formats
• An exclusive marketing region reserved for you

Fiduciary advisors have been succeeding with FMT for more than 20 years, but there’s never been a better time to get into financial education. In over 500 virtual courses conducted between 2020 and early 2021, online seminars with FMT have attracted an average of 20% more attendees than pre-COVID in-person courses.  

The advisors we work with have reported that their virtual courses are attracting more AUM than ever before. It’s not unusual for an advisor to attract 3+ clients per course and millions in new household AUM. Get in touch today to start acquiring lifelong clients and future-proofing your practice with FMT.