What your clients are really looking for in their advisor
The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.
Chris Corbes made his clients money, so he couldn’t figure out why he was having trouble getting new clients.
Chris had been an advisor for ten years, making roughly $180K annually. Before becoming an advisor, he’d been an analyst with expertise in judging public companies and their prospects for share growth. By combining his analyst’s insights with sound investment strategies, Chris did well as an advisor, generally outperforming the rest of the advisors in his firm in terms of client portfolio growth. But it always frustrated Chris that most of his competitors seemed to have an easier time growing their clientele.
I asked Chris, “How do you go about finding new clients?”
“Word of mouth, mostly. Referrals.”
“What about specific marketing and promotional activities?”
“The occasional thing, but I’ve always relied on my reputation. I figure the word will get around if I make my clients money. In my first few years in the business, that’s what happened. I just seemed to have a steady enough flow of referrals.”
“Chris,” I said, “during your early years in the business, you would have built your clientele from people within your immediate network, people who knew you and were comfortable with you. That core network can carry you for a few years, but as your business matures, you need to find more reliable ways of gaining access to high-quality prospects as you start to move upmarket.
“Another thing that’s changed is the market. You came into the business in a bull market. Investors had a different attitude to investments and to working with advisors back then.”
“Yeah, but people need advisors more than ever now.”
“Yes, that’s true,” I said, “but on this side of the collapse, people have more clarity about what they look for in an advisor.”
“Surely they want an advisor who makes them money. I’ve proven I do that consistently.”
“Obviously nobody wants an advisor who’s going to lose them money, but the reality is, making money is not the number one thing most people look for in an advisor.”
Chris shot me a look of shock.
“Most surveys of consumers, such as the one done by the Certified Financial Planner Board of Standards, show that issues like ‘trust’ and ‘someone who listens’ are things people value most when choosing an advisor. In fact, some studies show that ‘making me money’ isn’t even in the top half dozen.”
Chris had trouble believing me.
“I don’t know if this is why,” I said, “but it seems there’s a loss of innocence out there. People know there’s more to their relationship with their investment advisor than just ‘make me money’. Money issues are emotional, especially when people get hurt financially. They want an advisor who can relate to them.”
“I relate well with all my clients. And I’m certainly trustworthy,” Chris said.
“Of course, but you can’t have a Field-of-Dreams attitude about growing your business. You can’t say, ‘If I make them money, they will come.’ It just doesn’t work that way. Especially not for someone like you at the stage you’re at in your business. When you first started out, I’m sure you took on anybody as a client. Anyone who had a few dollars to invest.”
Chris nodded.
“But now, the value of your time has increased. You want to work with a certain level of person. The only way to ensure you’re creating a steady supply of high-quality prospects is to promote yourself. Do some marketing.”
Chris was a backroom type of advisor who enjoyed playing with the numbers, poring over annual reports financials, and digging around media for insights into a company’s strategy. I could see he didn’t like the idea of having to work too hard for new clients.
“Marketing isn’t an option when you run a business,” I said. “You might have chosen to be an advisor because you enjoy the numbers, but the reality is you’re running a business, and there simply isn’t a business around that can operate without marketing.”
Chris nodded reluctantly.
“But it doesn’t have to be a chore, Chris. In fact, it can be enjoyable, especially when it works. Although marketing takes some planning and effort, an effective campaign will pay for itself dozens of times over. You might spend a few hundred or a few thousand on a campaign that could generate tens of thousands in fees or commissions over the next few months. If you like numbers, that should impress you.”
That got Chris’s attention.
“But, Chris, I think you’ve got to look hard at what marketing activities you do. If people are looking for an advisor with qualities like trustworthiness, listening, caring, an ability to connect… you’ve got to find ways to demonstrate those more intangible qualities.”
Chris looked to me for ideas.
“A client of mine, Peter Chandler, who runs a Canaccord branch in Waterloo, is a superb example of someone who knows exactly how to market himself and his office. Peter understands perfectly well that it’s not just performance that counts -- that people place a high value on the personal relationships they have with their advisors and so runs marketing campaigns that showcase the personal qualities of his advisors. Peter does this by combining promotional activities with community-building efforts.
“For example, Peter recently wanted to do something to support the local theatre and came up with a way of doing so that would also allow him to promote his services. In working with the local theatre, he told them he would be able to fill the house to capacity with people if the theatre let him have the place to himself for an evening at cost. The theatre loved the idea. They knew the public would support their productions if it saw them, but attracting people in the first place was their biggest challenge. If Peter could fill the house and cover their costs, that was a great deal for them. To make the evening of greater value to his clients and prospects, Peter arranged for an expert to present on an investment topic people would be interested in. A fund company sponsored the speaker. The event was billed as an evening of education and entertainment. Peter and all the advisors in his office invited their clients to come for free and encouraged them to bring a guest. During breaks and intermissions Peter and his advisors mingled with their clients and guests. To fill the room, Peter sent out invitations and promoted it through the local radio and newspapers. Needless to say, the theatre was packed to capacity and the evening was a huge success.
“Everyone wins. The theatre gains new supporters and patrons. The clients learn something and get to see a show for free, plus they get the opportunity to do a friend a favor by inviting them along. And the advisor wins in multiple ways. The clients’ guests are perfect prospects for the advisors because these types of events tend to attract people with desirable demographic and psychographic profiles – educated, cultural minded, well-off, family values. The evening is an opportunity to connect with clients and their friends, to deepen existing relationships and develop new ones. Everyone sees the advisor as a supporter of the community, and therefore someone who has integrity and cares.
“Peter does many of these types of events throughout the year,” I said, “and each of them is a success.”
Chris could see now that marketing didn’t have to be a dull, expensive and dubious endeavour, but could be a fun way to effectively showcase that he wasn’t just somebody who can make his clients money, but someone capable of making a deeper connection.
Within a few months, Chris ran his own community-building event, supporting an animal shelter, something he cares deeply about, and something he was pleased to discover that his clients and many of their friends also cared strongly about. He is looking forward to running more such events and doubts he’ll ever complain about not having enough prospects.
Lessons Learned
Chris learned three important lessons about gaining prospects:
- When choosing an advisor, most investors value qualities like trust and listening above making money.
- To impress prospects, advisors need to demonstrate all the qualities investors are looking for, not just focus on their ability to make them money.
- Combining marketing activities with community-building efforts is a highly effective way of demonstrating the breadth of your qualities as an advisor.
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The Covenant Group is referred to by many as the place entrepreneurs go to become Business Builders. They are considered to be thought leaders and have authored the best-selling books, The 8 Best Practices of High-Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.