Expert: Adam Price, Chair & Founder, VouchedFor Facilitator: Paul Miles, Silverback Consulting
Headlines:
- Referrals remain the most effective client acquisition channel but are underutilised due to low client engagement and adviser reluctance to discuss them.
- Mass marketing faces significant challenges in the financial advice sector, with societal attitudes and cost-effectiveness being key barriers.
- Emerging opportunities include workplace financial coaching, personalised digital outreach, and leveraging influencers to increase visibility and attract new clients.
Discussion points:
Framework for Client Acquisition
The speaker introduced a structured approach for analysing marketing channels, emphasizing the importance of addressing a “10X problem” instead of focusing on incremental improvements. Currently, about 5 million people seek financial advice, representing only 25% of the 250,000-pound AUM population. The primary challenge lies in persuading a larger audience to recognize the value of financial advice.
The Power and Challenges of Referrals
Referrals were highlighted as crucial to the industry, but there is a significant gap between potential and actual referrals. While 99% of clients would recommend their adviser, only 34% have done so more than once in the last year. Key barriers include advisers’ discomfort in discussing referrals and the ‘referral ceiling’ caused by capacity constraints.
Strategies to Increase Referrals
Several strategies were suggested to increase referrals:
- Client Education: Explaining the business model to clients to help them understand the referral process.
- Focus on Life Stages: Tailoring conversations around key client milestones to make referrals more organic.
- Gratitude and Visibility: Showing appreciation for referrals and boosting online presence to pass the “Google test.”
- Team Training: Training teams to ask for referrals and setting key performance indicators (KPIs) to track referral-related goals.
Challenges and Opportunities in Mass Marketing
Mass marketing channels like TV ads and newspaper campaigns have proven less effective in the financial advice sector. Societal attitudes towards money and financial planning limit engagement, and high costs combined with difficulty in isolating high-value clients make these approaches less viable.
Workplace Financial Coaching as a Growth Avenue
Workplace financial coaching emerged as a promising strategy for client acquisition. Personalised outreach significantly increased engagement, with direct email approaches boosting response rates from 5% to 50%. The workplace setting is seen as a scalable way to engage potential clients early in their financial planning journey.
Influencers and Digital Marketing
Influencer marketing was cited as an emerging trend that resonates with younger audiences. While these campaigns attract attention, many inquiries tend to come from DIY investors, highlighting the need to more effectively target high-value clients.
Key takeaways:
- Enhance Referral Strategies: Advisers should proactively discuss referrals with clients, emphasising how referrals align with their business model. Celebrating achievements and sharing them with local press and clients can also build visibility and trust.
- Focus on Personalization: Personalising communication in workplace financial coaching and other digital outreach efforts can significantly boost engagement.
- Leverage Technology: Explore AI tools to provide real-time feedback during meetings, enhancing interactivity and value for clients.
- Targeted Marketing Efforts: Shift resources away from mass marketing towards localized, high-value client-focused campaigns.
- Develop Paid Services: Consider offering paid services, such as retirement income reviews, to attract clients and demonstrate value.
