The Securities and Exchange Commission’s modernized advertising and marketing rules will finally go into effect May 4 and RIAs must adjust to a new paradigm, where advisors can sell themselves leveraging testimonials and endorsements.
But before jumping into the planning and execution phase, however, let me tell you exactly what not to do.
I have read all sorts of articles on how you can take advantage of the new marketing rule and virtually none that help advisors avoid the wasting time and savings headaches that would come from doing this wrong. I see RIAs potentially screwing up four ways.
Ignoring the new rules
I get it. Many advisors already feel overwhelmed with their normal day-to-day responsibilities. Client meetings, financial plans, investment management tasks, and a hundred other things feel like they should come before engaging an unproven marketing tactic.
However, these rule changes matter. Advisors need to find or make time to consider and do something in response.
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Testimonials and endorsements are going to speed up the trust building process with prospects and help advisors reach new audiences locally. Right now, everyone is in the same boat (unable to use testimonials and endorsements). When the new rule goes into effect, advisors who make the right moves will gain an advantage that will compound over time. Think about what you tell young people about getting into the savings game early — use your own advice.
Remember that we are in the midst of the Great Wealth Transfer and now is the time to prioritize growth. A commitment to a marketing strategy today will improve your quality of life in the long run.
Biting off more than you can chew
New marketing toys or strategies are a slippery slope. Advisors might feel compelled to contact an agency to produce testimonial videos and sign up for a marketing platform. Never mind that they have not identified a single client who might be a good fit to record that testimonial!
Don’t let this turn into another marketing rabbit hole. Yes, the new marketing rules offer several new tactics, such as client case studies, third-party reviews, video and written testimonials, and paid endorsements to facilitate growth and goodwill with current clients.
Start small. Reach out to some of your best client relationships. Ask if they would consider leaving a review. Put out the feelers for who would be comfortable doing it on video. Come up with a plan to thank those who opt in. Find a few examples of testimonial videos that you like and think about what made those videos effective. But, please, do not jump into this head-first.
Failing to humanize the value you deliver
A testimonial is an opportunity to talk about your firm and the services you offer. However, if you approach it primarily from that angle, you will miss your chance to create an emotional connection with the prospect.
Instead, focus on the client’s transformation. Get them talking about where they started and where they are now. Highlight “aha” moments that they have experienced during the planning process. Dig into the decisions that moved them closer to achieving their goals. An authentic client testimonial has the power to make the prospect fall in love with what you do. It won’t have that effect if it looks dry or forced.
Giving up after some limited success
Patience is a virtue when it comes to reviews on platforms like Google and Yelp.
Realistically, over the first six months, an advisor can expect a handful of clients will leave positive reviews. Perhaps a prospect or two will mention those reviews during their discovery meetings. But at a certain point, you may ask yourself, “Is this really worth the time?” Reaching out to clients to leave reviews and ensuring that they feel appreciated for having done so can get cumbersome… And that’s before you throw in all the time and money that goes into producing professional-grade testimonial videos.
If early results look disproportionately small for the effort, keep going.
Reviews have fantastic search engine optimization, or SEO, value. They make an advisor more easily discoverable as investors try to find a wealth manager online, they help drive people to an advisor’s website. Remember that this is a long game. When a prospect is looking to hire a financial advisor, they are about to make one of the most important decisions of their life. The more positive reviews you have from diverse clients, the more prospects will see you through the lens of third-party validation and credibility.
I know marketing is hard, and these new marketing rules add another layer of complexity. I hope that these ideas will help you avoid a few of the anticipated challenges that I see independent financial advisors struggling with while creating their strategies for testimonials and endorsements.
Patrick Brewer is the president and chief marketing officer at WealthSource Partners, an RIA in San Luis Obispo, Calif. that manages $1.6 billion.
RIA Intel is committed to publishing diverse opinions relevant to its readers. If interested in contributing a column, email Greg Bartalos, RIA Intel's editor, at Greg.Bartalos@institutionalinvestor.com