Joel Baldwin, a fee-based advisor in Indianapolis Indiana, has a thriving practice called Fiduciary Financial Management. Like most advisors, Joel’s assets under management declined in late 2008 and early 2009. The market rebound later in 2009 combined with a few new clients allowed him to end the year with assets under management near his high point. The clients he acquired in 2009 also helped to convince him there were other prospects looking for his services. He decided to create a formal 2010 marketing plan that includes specific client acquisition goals.

 

The first step Joel took in developing his marketing plan was to review his vision for his practice. As he created his plan, he wanted to ensure that the clients he was acquiring were helping him to narrow the gap between his current practice and the practice of his vision.

 

Fiduciary Financial Management has two financial advisors, Joel and Matt Zentz, and four support staff. The firm has a strategic partnership with an accounting firm that is generating a couple of referrals per year. In the past, the technical skills and cultural fit have been more important than the referrals and Joel believes that the success of the arrangement can be traced directly to this prioritization. If referrals had been the primary driver of the relationship, the strategic relationship would not have gone as smoothly or been as successful.

 

The accounting firm provides Fiduciary Financial with stock option analysis for their clients. 20% of the firm’s clients work for a local medical products company called Biomed that issues stock options to its employees. Joel would like to increase his presence with this employer to 40% of his clients over time. The accounting firm also has a significant number of clients at the Biomed, uses Fiduciary Financial for financial planning services for its clients and has referred a few of the accounting firm’s clients to Fiduciary Financial for more comprehensive financial planning services.

 

Joel helps his clients gain confidence in their ability to retire by reducing the risk in their concentrated stock positions. He focuses on senior management in Fortune 1000 companies, particularly Biomed. By focusing his marketing messages around concentrated stock positions, retirement planning and the value of financial planning, he makes it easier for prospective clients to understand how Fiduciary Financial can help them. (A side bar at the end of this article summarizes key aspects of Joel’s marketing strategy.)

 

Fiduciary Financial is up to date on the Roth Conversion opportunity for 2010 and has a defined process to evaluate the Roth for their clients. Matt, the point person for Roth Conversions, has developed a presentation and has ideas for a couple of newspaper articles about the Roth. Through Matt, Fiduciary Financial is prepared to use the Roth opportunity in its marketing plans; however, Joel and Matt are concerned that too many firms may be emphasizing Roth Conversions and that they will get lost in the noise. They will hold the Roth ideas to the side and concentrate their primary communications on reducing fixed costs in retirement and using options to reduce concentrated stock risk.

 

The market downturn reduced revenue in 2009 (compared to 2008) by 15%. Joel and Matt want to see revenue increase by 25% in 2010 and the market recovery has them well positioned to achieve that. They would like to see market growth contribute 10% toward their revenue goal, new business from existing clients contribute 10% and new clients contribute 5%. Although they do not have much experience with new client acquisition, they see their goal of six new clients as doable with three of the clients coming from Biomed. 

 

Separately, they plan to increase their number of contacts at Biomed. They currently know 30 people at the firm and want to grow this to 70 people by the end of the year. Increasing the number of people they know at the firm will provide long term benefits by creating the impression that Joel and Matt are insiders at the firm and by increasing the number of prospective clients in the pipeline.

 

Lunch and coffee conversations will be the primary marketing activity for Fiduciary Financial. Joel recognizes that it will take a personal connection for prospects with significant assets to become a client and he plans to foster those connections through existing clients, through centers of influence and through networking. By having at least one meeting per week with Biomed connections, Joel plans to increase his contacts at the company from 16 clients and 14 connections to 19 clients and 50 connections by the end of the year. (A sidebar at the end of this article describes how to ask for referrals.)

 

Those connections will come from meetings with his existing clients and connections. Joel and Matt will begin by asking their existing connections about people they should know in Biomed, ways they can help the firm and its employees, and ways they can connect with more senior employees (through community groups, widely read publications or a professional association). Joel expects to get the names of specific employees they can meet and he thinks there is a good chance his firm can get referrals to senior leaders to discuss benefits. It is less likely that he will find a way to have regular contact with employees through a community group, a publication or a professional association.

 

The firm’s messages about managing concentrated stock, enhancing confidence in their ability to retire and understanding the value of financial planning will be repeated over and over again in these lunches. The messages will be reinforced through other marketing activities. Joel and Matt will give six presentations during the year to community groups and employee groups. They will write six articles on the topics for publication in the Indianapolis Star newspaper, in community publications and in industry publications for Biomed’s industry. These articles and presentations will be added to the firm’s web site and emailed to clients, centers of influence and connections to expand the reach of the marketing activities. (The key elements of Joel’s marketing plan are summarized at the end of the article.)

 

The marketing activities (lunches, writing and speaking) were selected based on the strengths Joel and Matt bring to the table combined with the degree the market will accept the activities. Joel and Matt enjoy these activities and want to do more of them—that helps them schedule the activities. 

 

These are also activities that clients and prospect clients will accept and welcome. Generally, senior leaders do not “hang out” together after work whether it is at a local bar, a country club or a community organization. You may be able to connect with a couple of leaders of a single company through some organization but cannot reach very many executives in one spot. Individual meetings and events you sponsor (events to gather a few leaders in one spot) are two ways to gain access. It still makes sense for Joel to ask clients about ways you can interact with the leadership of the company but he does not expect to find a silver bullet. 

 

Rounding out the marketing plan, Fiduciary Financial has defined its communication plan for existing clients and prospects. The communication plan outlines each touch planned for each segment of the business. Fiduciary Financial has three client segments plus prospective clients. The plan defines how Joel’s best clients will receive 28 touches (including monthly statements), how all clients will receive at least ten touches and how prospects will receive at least six touches.

 

The final step in developing the marketing plan is to confirm that your planned activity should be sufficient to meet your goals for the year. Joel is trying a new marketing activity, weekly lunches, and he is uncertain how many clients he should expect. Some 90% of his referrals have become clients in the past but traditionally he has done little to encourage referrals. Joel expects that some of his referrals will be less motivated if he asks them to come in instead of waiting until they call. To be safe, he is estimating that it will take eight lunches to yield one client and he will adjust that estimate after one year of effort. Between he and Matt, Joel expects his weekly lunches to yield the six new clients in his plan.

 

Although his new client goal appears within reach, his separate networking goal will not be met through weekly lunches.   He needs to meet approximately 40 people from Biomed this year. The 52 lunches will allow him to meet 20 to 30 new people but the first lunches will be with people he already knows (asking for referrals and information). Also he is likely to be referred to some people who do not work for Biomed. Joel decides to add 20 more lunches to meet this goal.

 

Joel chooses not to measure his supplementary activities this year (presentations, articles, communication plan). He will not measure his requests for referral during review meetings either (many of the lunches will be requests for referrals and these will be measured).   He does not think these activities are scheduled frequently enough to provide reliable measures.

 

Joel Baldwin has developed his marketing plan to meet his goals for 2010, to move his practice incrementally toward the practice of his vision and to reinforce the key elements that differentiate his practice in the market. There are not a lot of moving parts to the plan but it does require a significant commitment from Joel, his partner and his staff.

 

The current economic environment creates a lot of uncertainty for financial advisors and clients. If you can help your clients¸ your prospects and your community reduce that uncertainty, it will help your practice grow. If you can help those same stakeholders become more comfortable with the uncertainty that remains, it will help you create the practice you envision. Where will your vision take your practice?

 

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©2010 Comer Consulting, LLC

 

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Fiduciary Financial has clearly defined its market, its services and its individuality. The firm helps senior executives at Biomed and other local firms manage their concentrated stock positions and plan their retirement. It identifies client solutions through the financial planning process and explicitly charges for financial plans. The firm has one strategic partner providing technical expertise and is open to developing additional strategic relationships.  By defining these aspects of its practice Fiduciary Financial positions itself as unique in its market.

 

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Advisor Impact has conducted significant research into client loyalty and referrals. According to their research, very few clients make referrals to help the advisor (6% of the referrals according to their research). Clients make referrals to help the person being referred (54% said a friend asked for a referral and 45% said a friend described a need—totals more than 100% due to multiple responses). If clients make referrals to help their friends and co-workers, how can an advisor encourage referrals?

 

Two elements should be conveyed in your referral conversation: you are open for business and you are in business to help others. Some advisors put on such a good show of their success that clients do not understand they are still growing their practice. Make a point to let your clients know that you will talk with new prospective clients—your doors are always open to help someone who needs your skills. Your skills may be specialized enough that you cannot help everyone in every situation but for those who need the level of expertise you bring to the table, you are always willing to explore working together.

 

Focus on client needs, not on your needs. You do not want referrals to help your business grow; you want referrals because some people need your specialized expertise to meet their financial goals. If your clients have been helped by your services and know of a friend or neighbor who might benefit from your services, you would be happy to talk to them. You would be happy to explore whether your skills and services are a match for their needs.

 

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Joel wants to grow his practice this year by adding new clients and building on his base in his target market. His outbound marketing activities and his referral strategy will focus on his target market. Joel will continue to accept small business owners, retirees and employees at other firms as clients.

 

Fiduciary Financial will measure its results from its “lunch” meetings. These meetings might take place over lunch, dinner, coffee or a drink. The key distinction is that when these meetings are with clients, they are in addition to the regular review meetings. The purpose of the meetings with clients is to gather information and referrals to build the practice. The purpose of the meetings with prospects is to get to know people in the market and, potentially, discuss a formal working relationship. Since Joel has limited experience with these meetings to gauge his success, he will plan to acquire a new client with every eight meetings and will revise that measure to reflect his actual experience.

 

Supplementing these lunches will be requests for referral from existing clients during review meetings and a few presentations and articles. The firm’s communication plan is also an important element to build relationships with existing clients and earn the right to a referral.

 

It is also necessary to communicate consistent messages. Fiduciary Financial will deliver these messages through lunch conversations, email messages to clients, client newsletters, presentations and articles. The messages themselves will focus on concentrated stock positions, retirement planning and the value of financial planning. Specifically, the messages are:

 

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Include these steps in developing your plan: