The Acquisition Transition

New client acquisition is the bane of almost every financial advisor.  Finding new business is the lifeline of every financial practice but most advisors complain that acquisition tasks are tedious, time-consuming and often costly.  Many argue that the rise of robo-technology and growing numbers of do-it-yourself investors make acquisition efforts an increasingly difficult endeavor.

Under The Radar Prospect Pool

While there are varying degrees of truth to these observations, a bountiful pool of affluent prospects remains largely untapped if for no other reason than they are hiding in plain sight.  They are professionals, business owners and entrepreneurs who have achieved significant levels of success and wealth.   Their numbers are vast and they are ideal prospects by any definition of the word. Yet, they generally remain sight unseen.  They fail to show up on the acquisition radar of most advisors because of one inexcusable factor:  they are women.

Times have changed.  In the traditionally male-dominated world of finance, the perception that men rule is no longer the rule of thumb that determines acquisition success.  Women have quietly risen to roles of prominence in the wealth management arena both as advisors and clients and their ascendance on both sides of the equation is a trend that is expected to continue for generations to come.

The Realities of Women and Wealth

Research into the female financial phenomenon tells a compelling story:

• Women currently control about 60% of the wealth in America
• Almost half of the millionaires in the United States are female
• 70% of assets transferred over the next two generations will be controlled by women
• Women are becoming wealthy at twice the rate of men
• Women currently earn almost half of all law and medical degrees

The rise of women as investors will have a profound impact on advisor acquisition and retention performance.  Industry research reveals that within one year of the death of their spouse, about 70% of females will switch financial advisors.  While this is bad news for advisors who lose these accounts, it’s good news for those who position themselves to capture the vast amounts of female-controlled assets that will be in motion.

Alter Your Perceptions

Value propositions must similarly transition to reflect the unique values of female investors.  Advisors who advocate holistic approaches that focus less on product performance and more on the purpose of money will thrive in the new environment. Females tend to be more emotionally attached to their money than men.  It’s why they will gravitate towards advisors who build relationships with them on a deeper, more personal level.  They are seeking relationships with advisors who understand not only what they say, but moreover, how they feel.  Value propositions that connect the dots linking head and heart will resonate with female investors.

The hard skills of a financial advisor will always be important to both genders.  What will change is how soft skills are applied.  Women are more willing than men to be educated in the nuances of wealth management.  They want to learn about how their money is managed and advisors who can engage in a financial dialogue with women in a tone and style they are comfortable with find a receptive audience.  Satisfied female investors will also reward you for the extra effort by making more than twice the number of referrals as male clients.

Make Your Advisory Team Co-Ed

Advisory teams that don’t have a female member or members to color their perspective will struggle in the years ahead.  For this reason, achieving a better gender balance should be a primary goal for most teams.   The demand for female advisors is already exceeding supply, so opportunities for women in wealth management will rise exponentially in the coming years.  In next month’s article, we’ll explore what female advisors can do to prepare themselves for the challenges ahead.

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Like this tip?  Are you expanding your next generation of clients?  We have many powerful lessons and proven strategies to help you build a better practice and become even more successful as a financial advisor.  Contact us today about our coaching programs.

Altius Learning

888-569-0586, info@AltiusLearning.com

www.AltiusLearning.com 

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It doesn’t take a crystal ball to predict what’s going to happen in the financial services industry during the coming years.  A generational wealth transfer of historic proportions is about to occur that will transform the very nature of the financial advisory profession.

Survival Of The Fittest

Depending on how your advisory team is positioned, this epic transfer of wealth will be either the best of times or the worst of times.  Vast numbers of Baby Boomers are approaching retirement age and it’s estimated that more than $30 trillion dollars of their accumulated wealth will begin flowing to their heirs.  Where it goes and how it’s managed are unanswered questions that are causing many financial professionals to toss-and-turn in their sleep.

This seismic shift in generational wealth transfer is cause for advisory teams to rethink how their business models are structured and for many, it couldn’t happen at a worse time.  With the average age of financial advisors now 50 years of age, the likelihood of a serious disconnect between today’s advisors and tomorrow’s investors is not only possible but probable.

It’s true that people like to do business with people they know and trust.  What’s even truer is that people like doing business with people who are similar to them, people that they connect with on a more personal level because of shared interests, preferences, traits and especially – values. According to research by Legacy Capital, 80% of millennials are not receiving guidance from their parent’s advisors. It’s logical to conclude that graying advisors will encounter a difficult if not impossible task of identifying with the new generations of investors because of the profound age and cultural gaps that exist.

Re-engineer Your Advisory Team

The upcoming transformational shift in wealth will find many advisory teams struggling to adapt while others evolve in ways that mirror the diverse demographic makeup of nextgen investors.  Teams that recruit, train and retain young advisors who see the world through the same lens as the new generations of investors will be proactively positioned for change as it happens.

While significant numbers of the nextgen population will inherit sizeable wealth, the majority of them will still earn it the old-fashioned way –  over time, through hard work and achievement.  This is more good news for advisory teams that have proactively assimilated younger advisors into their fold.  They’ll have the opportunity to establish relationships early-on with this new breed of investors before they reach their peak earning years.  Young advisors will enjoy the luxury of time to earn the trust necessary to guide their peers through subsequent phases of their financial lives.

Think Different

Infusing your advisory team with young blood is smart planning, but it’s just one step along a longer path your team must travel.  The mindset of your team must similarly evolve. As the advisory profession continues to gravitate towards digital asset management mechanisms, value propositions that rely heavily on product or project performance rather than outcomes will diminish in importance.  Conversely, value propositions with messaging that speak to the new generations on a deeper, more emotional level will touch them where it matters most – in their hearts. Acquiring the ability to connect with young investors factually and emotionally is the spark that can ignite the growth of your advisory team.

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Like this tip?  Are you expanding your next generation of clients?  We have many powerful lessons and proven strategies to help you build a better practice and become even more successful as a financial advisor.  Contact us today about our coaching programs.

Altius Learning

888-569-0586, info@AltiusLearning.com

www.AltiusLearning.com 

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Ask a group of financial advisors which client activity is more important – acquisition or retention – and chances are their replies will be divided equally between the two choices.  It’s a question every advisor struggles to answer correctly: do I focus my work day on finding new business or do I allocate my time on efforts that solidify relationships with standing clientele?

Make The Right Choice

The debate over which answer is correct is as paradoxical as trying to argue which came first – the chicken or the egg.  Acquisition and retention strategies are not mutually exclusive.  For an advisory practice to consistently grow, both strategies must be implemented simultaneously because together, they form a symbiotic synergy where the whole becomes greater than the sum of its parts.

A reality of the advisory profession is that no matter how good you are, you will lose clients.  Some clients will unfortunately die.  Others will be pirated away by the competition.  A few will relocate and prefer to work with an advisor in their new hometown.  Some will become dissatisfied for reasons known and unknown and terminate the relationship.  Regardless of why they leave, the result is the same: they’re gone and they must be replaced.  It’s why client acquisition must be an ongoing process in every advisory practice.

Merge Acquisition And Retention Strategies

In many advisory practices, client acquisition and retention strategies are disconnected marketing components in a zero-sum game.  For every client acquired, another one is lost. They continually shift focus back-and-forth from one strategy to the other only to find themselves trapped on a miscalculated marketing merry-go-round that takes their practice nowhere.

High performance advisors and advisory teams take a more proactive approach.  They understand that without an acquisition plan, they will eventually have fewer clients to retain.  On the flip side, they also know that without retention strategies in place, they’ll lose clients and one of the lowest cost ways of bringing in new business – referrals.  The reason they succeed while others struggle is because they proactively synchronize acquisition and retention strategies together rather than view them as separate and distinctive propositions.

Not all advisory practices are the same.  Some are more challenged by acquisition and some by retention.  Leveraging the right amount of time and effort will vary depending upon each firm’s unique situation but the formula for success will always remain the same:  both strategies must be implemented concurrently for a consistent and predictable growth.

Retention Fuels Acquisition

Keeping clients is always easier and less costly than finding new ones; however, for your practice to grow, you’ll have to continually acquire.  Maintaining the status quo is never an option because it’s a myth.  Your practice is either expanding or shrinking.  There is no safe middle ground.

Top advisors and advisory teams place equal value upon acquisition and retention.  How they allocate their time and resources may vary, but their commitment to each is unwavering.  They’ve learned that by implementing both strategies symmetrically, they can “have their cake and eat it, too.”

Balance your practice’s client acquisition and retention strategies correctly and growth is inevitable.  You’ll also gain a powerful competitive edge because it’s estimated that less than 40 per cent of companies and agencies have an equal focus on both strategies.  In a time when differentiators separating one advisor from another are evaporating, how you acquire and retain your clients can become a defining component in your value proposition.

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Like this tip?  We have many powerful lessons and proven strategies to help you become a million-dollar financial advisor and beyond. Contact us today and find out how we can help you focus on client acquisition and retention strategies.

Altius Learning

888-569-0586, info@AltiusLearning.com

www.AltiusLearning.com 

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