Effectively managing clients’ money doesn’t necessarily translate into running a profitable business. The most successful financial advisors know how to do both. That’s primarily what makes them the highest paid in the field. Are you in this category?
Increased profitability is achieved by growth. That requires marketing knowledge, analytical superiority, and an ability to make prospects comfortable enough to become new clients. In this article, we’ll go over some key characteristics and habits of the highest paid financial advisors.
Accelerated Growth Comes from Comprehensive Marketing Plans
Marketing on any level requires an understanding of who your target market is. High-powered advisory firms focus on specific niches and own that particular space. This is the first step in running an effective marketing campaign. Know your audience.
Once a niche has been established, the next step is to create a message that resonates. Granted, wealth managers are not trained to be content professionals, but smart advisors hire top people to handle that messaging for them. It’s important to know how and when to delegate.
Step three is to discover the right channels to distribute your message. Where do your preferred clients tend to gather? What kinds of channels are most likely to reach them? Know where to market.
Finally, there’s the conversion process. Far too many wealth management firms neglect to add capture mechanisms to their website or work out an actual conversion process. Successful firms address these issues before launching a marketing campaign. Have a plan in place for how you intend to capture prospects and turn them into clients.
Treat Your Practice as a Business
The most successful advisors run their practice as a business. Advisors will build out their team with individuals that have specialties to gain scale. Specialties may include advisors who just manage existing clients vs marketing and bringing in new clients. Other areas may include someone to manage the money, someone to focus on technology and operations, and someone to actually run the business.
Firms that are able to build out their teams to have specialists are able to develop scale across a broader set of needs as they look to grow. This allows firms to have individuals focused on key areas such as marketing and new client development without being distracted with existing client service requests or managing and rebalancing portfolios.
Treating your practice as a business becomes less dependent on any one key person. While many practices have a primary advisor, the most successful and profitable practices are those that are not hamstrung by one key person. This doesn’t just have the effect of increasing scale and profitability but also has the effect of increasing the value of the business for potential buyers or future partners.
Building New Client Relationships
Market to specific niches, capture prospects when they come in, and build a solid client relationship. Rinse and repeat. That’s a formula for success, but there’s more to it than simply executing these three steps. Relationship building is difficult, and it’s different for every client.
This is the area that truly separates the top advisors in the country from the rest in the field. You can prospect for ultra-high net worth clients, but can you close the deal? Can you maintain those relationships through periods of market volatility?
Analytical abilities and salesmanship are two entirely different skill sets. Most advisors are strong in one area, but not necessarily both. If you’re looking to be one of the higher paid financial advisors, it’s necessary to strengthen the areas where you’re currently weak.
Portfolio construction or creating a financial plan is the easy part. Getting clients to feel comfortable, even when you have to make unexpected changes to their investment strategy, is what the best advisors are really good at.
Clients are Looking for Transparency
There’s a paradox here in that advisors who want to make more money have to think less about making money. They have to put the needs of their clients first, before profits or even growth. By doing that, the rest will happen organically.
Be transparent about how you get paid. If the client thinks there’s hidden fees, even if there aren’t, they may look elsewhere for financial advice. Your practice can only grow if your retention rate is higher than your attrition rate.
Final Thoughts
If you’re looking to grow your practice and increase your annual revenue, follow the simple tips we’ve laid out here. This is what high paid advisors are doing. There’s no luck or esoteric skill set involved. It’s all about hard work, proper marketing, and honest relationships.
At Bridgemark Strategies, we are leading financial advisor recruiters and consultants serving Financial Advisors, RIAs, and Broker/Dealers nationwide. Whether you’re changing broker-dealers, starting or joining an RIA, or looking for M&A opportunities, we can leverage our vast network and experience to help you discover and vet new firms so you can make the best choice for your needs.