Every financial advisor should ask himself or herself what he or she wants to be to clients and who those targeted clients are.
The focused plan that results from this process will differentiate advisors and their firms from the growing number of RIAs crowding the market, according to Andrew J. Evans, CEO and founder of Rossby Financial, an open-architecture, national RIA based in Melbourne, Fla.
Recently released Securities and Exchange Commission data showed that there has been a 35% increase in the number of RIAs since 2009, for a current total of more than 15,400. In that crowded market, advisors need a strategy for standing out, Evans said in an interview.
“Advisors need to take enough time to decide what they have to offer clients that is unique, and how they are going to win among the increased competition,” said Evans, who works with both advisors and retail clients. “The industry is changing from the ‘dark suited,’ formal advisor to a more casual persona.
“Advisors also need to decide what their personal style is and lean into that—not all advisors know how to do that,” he added. Firms can win on the investment side but lose clients, or never convert them from prospects to clients, if the advisors have an off-putting style.
Once a purpose for the firm is determined, the firm leaders need to develop a brand.
“Picking a logo is not branding,” Evans said. The brand should show what that firm is about and who the services are being developed for. Then the services and products need to be shown through good marketing, which may mean bringing in a professional marketing firm.
"A lot depends on marketing, which becomes a subset of the overall business strategy for the firm,” Evans said.
"Holistic" is an industry buzzword, but few firms define the concept of holistic planning in the initial materials they present to prospective clients, which is a necessary part of the branding process and operational strategy, Evans explained.
There are some concrete ways a firm can differentiate itself, such as by using a subscription business model that offers certain services for a set monthly or quarterly fee.
But there are numerous variations of service that can be offered for that $150-a-month fee, he said. “And again the strategies need to be defined in the initial marketing materials because it then becomes a promotional tool.”
Technology is becoming an increasingly important marketing tool and a way to increase required communication with clients.
“Technology needs to be continuously improved, but firm leaders need to thoroughly understand what they signed up for. How do you enter your data, and how do you get it back out easily? And that needs to be conveyed to clients,” he said.
For the clients under 50, a firm needs to be about true planning and not just investing. “Advisors need to remember the Gen X and millennial prospects and cater to their tech-savvy personalities,” Evans said.