Growing their business is one of the main focuses for many financial advisors and, as with any business, effective marketing is critical. In this context, ‘effective’ means not simply attracting new clients, but attracting the right type of clients – the ones who are aligned with you and your approach.
One of the easiest and most effective ways to stand out and attract new clients is by differentiating yourself from other advisory practices. While there are a number of ways to do so, arguably one of the least utilised, but most impactful approaches is to utilise your investment philosophy in your marketing efforts.
Throughout the other articles I have recently published via the Ensombl platform, one of the main discussion points has been around the importance of a clearly defined and comprehensive investment philosophy. Although the associated client service benefits of such a philosophy are generally appreciated, the marketing benefits are less so.
I think it’s a nuanced thing.
Imagine you owned a Ferrari Daytona, one of the most beautiful, and now valuable, cars ever made. Needless to say, keeping this car running at optimum performance requires the care of a highly trained and trusted specialist. The mechanic at your local servo might be fine with an old HiLux, but you wouldn’t be letting them get close to a vintage supercar.
Specialisation and niching your services – and communicating that specialisation – is one of the core principles for marketing any business, and financial advisory firms are no different.
The concept of the ideal client is thrown around a lot in financial advice and one level, the thinking around this can be simple, for example “I only deal with doctors/retirees/FIFO etc”.
Yet many advisors have never gone to the next level and considered the idea that an ideal client is also one who is philosophically aligned with their practice.
For example, an advisor who passionately believes in Graham-style value investing and has a yield-focused mindset is much more likely to attract a client base of older and more risk-conscious investors. In this case, would it not make sense for the advisor to make it clear through their marketing that their approach to investing focuses on preserving capital, purchasing assets for significantly less than they believe they are worth and buying assets at an attractive yield?
A marketing campaign focusing on this would appeal most to those clients that are seeking exactly what the advisor offers whilst also allowing the advisor to stay true to their investment beliefs.
One advisor that tailors the majority of his marketing around his investment philosophy is Tyson Jonas from Jonas Wealth Management, who has previously featured in our investment philosophy series which can be found here
One of the major benefits he derives from putting his investment philosophy at the heart of his marketing is efficiency, as explained below.
“I used to spend a great deal of time in first appointments discussing my, admittedly, controversial investment philosophy which is fundamentally based on the ideas that markets are irrational, for true value to be on offer it has to be in a hated investment, and great opportunities are rare, so it makes sense to be incredibly greedy (concentrated) when you find one. I was having too many first meetings that weren’t proceeding. However, trialling and basing my marketing around how I invest resulted in prospective clients being interested in my philosophy. My conversion rate has climbed substantially, and my initial meetings are now focused on how I can assist clients, not on how I invest.”
Similarly, an advisor who firmly believes in ESG-focused investing and utilising investments to make the world a better place is going to have deeper, mor enduring client relationships, and find more fulfilment in working with clients that share these beliefs. If this advisor was to develop marketing campaigns around their ESG-based investment philosophies, they would find that the clients which are engaged by these marketing activities are going to share similar personal values.
While different advisors have different investment philosophies, all varying in complexity, one of the pillars of great advice is being able have your client understand your advice. This means avoiding the unnecessary jargon and technical languages that plagues our sector.
Through incorporating a simple and easily understood investment philosophy in into existing marketing efforts, advisors will be able to attract more of their ideal clients. And don’t worry about your philosophy being too narrow. Regardless of whether you subscribe to a value, growth, passive, active or hybrid investment philosophy, there simply aren’t enough advisors to meet client demand.
The core pillars of marketing are: Product, Price, Place and Promotion. Whilst “Product” can have a negative connotation in the advice industry, the Product that advisors provide is not what first comes to mind, being a something the client acquires i.e. a platform, managed fund or insurance policy.
The product that advisors offers client is the peace of mind knowing that their financial future is secure, that they are going to implement the most appropriate strategies for their goals, that their money will be invested in a clearly defined way and that they will have the support of their advisor when times are uncertain.
By integrating your investment philosophy into your marketing mix you will be better able to appeal to your idea target market and provide a clear point of differentiation vs other advisory firms. Additionally, it can help remove some of the mystery many clients feel before seeing an advisor (to many consumers, the concept of financial advice remains intangible).
Integrating your investment philosophy into your marketing might just be one of the best investments you will ever make.
Schroders has launched an investment education space on the Ensombl platform to give advisors a safe space to expand their investment knowledge to have more influential conversations with their clients. Join the space here
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This document does not contain and should not be taken as containing any financial product advice or financial product recommendations. This document does not take into consideration any recipient’s objectives, financial situation or needs. Before making any decision relating to a Schroders fund, you should obtain and read a copy of the product disclosure statement available at www.schroders.com.au or other relevant disclosure document for that fund and consider the appropriateness of the fund to your objectives, financial situation and needs. All investments carry risk, and the repayment of capital and performance in any of the funds named in this document are not guaranteed by Schroders or any company in the Schroders Group. The material contained in this document is not intended to provide, and should not be relied on for accounting, legal or tax advice.
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Opinions, estimates and projections contained in this document reflect the opinions of the authors as at the date of this document and are subject to change without notice. “Forward-looking” information, such as forecasts or projections, are not guarantees of any future performance and there is no assurance that any forecast or projection will be realised. Past performance is not a reliable indicator of future performance. All references to securities, sectors, regions and/or countries are made for illustrative purposes only and are not to be construed as recommendations to buy, sell or hold.
Telephone calls and other electronic communications with Schroders representatives may be recorded.
This document is issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders).
This document does not contain and should not be taken as containing any financial product advice or financial product recommendations. This document does not take into consideration any recipient’s objectives, financial situation or needs. Before making any decision relating to a Schroders fund, you should obtain and read a copy of the product disclosure statement available at www.schroders.com.au or other relevant disclosure document for that fund and consider the appropriateness of the fund to your objectives, financial situation and needs. All investments carry risk, and the repayment of capital and performance in any of the funds named in this document are not guaranteed by Schroders or any company in the Schroders Group. The material contained in this document is not intended to provide, and should not be relied on for accounting, legal or tax advice.
Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this document. To the maximum extent permitted by law, Schroders, every company in the Schroders plc group, and their respective directors, officers, employees, consultants and agents exclude all liability (however arising) for any direct or indirect loss or damage that may be suffered by the recipient or any other person in connection with this document.
Opinions, estimates and projections contained in this document reflect the opinions of the authors as at the date of this document and are subject to change without notice. “Forward-looking” information, such as forecasts or projections, are not guarantees of any future performance and there is no assurance that any forecast or projection will be realised. Past performance is not a reliable indicator of future performance. All references to securities, sectors, regions and/or countries are made for illustrative purposes only and are not to be construed as recommendations to buy, sell or hold.
Telephone calls and other electronic communications with Schroders representatives may be recorded.
