If you’re responsible for driving lead generation for your organization’s financial advisors then you are going to want to read this.
Lead generation, for financial advisors and the institutions they represent, is arguably the single most important thing needed for consistent and scalable growth. Financial professionals and their organizations need warm, inbound leads to not only transact more products and services but increase the retention of those sales and the financial professionals selling them. Leveraging leadgen pipelines offers increased sustainability and scalability over natural markets.

How Natural Markets Can Be Natural Disasters

Natural markets, sometimes referred to as “Project 100” or 200, are a segment of the much larger consumer market with whom the financial professional has a relationship or has shared common experiences such as life experiences, values, or culture[ML1] . A common way advisors are taught to come up with their natural market is to answer the question – if you were getting married today, who would you invite? The power of a natural market is a two-way street.

For financial advisors, the natural market can be easy to identify (even if having the conversation is tougher). For consumers, the most common way to find financial advice is from getting a referral from a friend or a family member[ML2]. Consumers also utilize a “natural market” to find financial advice. Natural markets represent a somewhat symbiotic relationship.

Yet, natural markets, like nearly all natural resources, dry up when overused. The faster an advisor taps their natural market – the faster it will ultimately dry up. And, the natural market is not something that can be easily restocked. Relatedly, research from the Kitces.com platform finds that financial planning firms growing primarily by way of referrals do not grow as fast as firms that are able to bring in prospects from sources beyond their natural markets[ML3] . Other research has even found that the wealthier the client the less likely that they would give their advisor access to their natural market. The wealthier the client the less likely they are to give their advisor a referral. Natural markets are great, but understanding and planning for their limits is crucial.

Failing to respect or understand the limits of natural markets can end in a natural disaster. For example, in the first few years (three to five) advisory firms commonly “grow broke[ML4] ”. The firm can or will be profitable given time, but not initially. It takes more money to attract and grow in those initial years than what is available in the bank . Thus the industry ends out losing more financial advisors in those first few years than those retained[ML5] . Advisors are going out of business before their natural market becomes profitable.

Couplr founder & CEO, Derek Notman, saw and experienced this first hand. He started as an advisor with almost no natural market back in 2006. Although he was able to break through the very hard first few years the majority of advisors he saw come in failed out within the first three years. This leads to a slew of problems given how expensive it is to train & retain a new advisor. Retention of advisors and the products & services they sell is, as you know, a very important metric to watch.

Profitable (More Predictable) Prospect Pipelines

Advisory firms growing the fastest are those that have strong search engine optimization (SEO) and are using paid sites[ML6] . SEO and paid sites are efficient, their expense is easily offset by the prospects they bring in. Advisors that want to grow need to be prospecting while they sleep. The days of just working when they are awake and talking to individuals in their natural markets are fading.

SEO and paid sites can also create more predictability. They do not dry up and over the course of the year can be tracked. Tracking prospects and knowing what to expect year after year for the first three to five years can be hugely beneficial as financial planners decide to leave part-time gigs or purchase technology or other office considerations and yet still remain profitable. Having greater understanding of what to expect from a prospect perspective can give newer financial advisors (and more mature advisors & planners) greater control over business planning and by result, staying power.

Thankfully, software as a service, SaaS lead generation, is also on the rise! There are more options than ever before to assist advisors and firms in packing a pipeline and creating more predictable prospecting. And this is also a two-way street. There is an increasing number of software applications being created and being utilized by consumers for finding love and dating matches, but also for finding professional service providers – financial services included. Financial advisor search is on the rise according to Google, which reports having a 75% rise in recent years[ML7] . More and more consumers are searching for advice. Thus more and more consumers are open to utilizing a software application to help them find a financial advisor.

Software as a service also integrates with or plays nicely with (paid – lists and SEO) organic traffic. Said another way, software as a service is not clickbait. Software as a service is helping those consumers who are already looking for advice find financial advisors & planners that are best to serve them. Advisors and larger advisor platforms can greatly improve the odds of staying in business and helping more clients when they utilize software.

SaaS Lead Generation to Grow Efficiently, Not Broke

Creating a pipeline serves two important needs – sustainability and predictability. It can be hard to predict when a natural market will dry up, surviving the trickle down can be difficult. Utilizing other inflows helps with sustainability and predictability does yet another great thing – predictability can help advisors make business decisions and stay with the industry longer. Tapping additional sources for prospects means more clients. Tapping those additional sources can offer more predictability in addition to the increase in prospects alone.

Being able to predict means advisors can grow more efficiently. Advisors will almost inevitably grow broke for at least a few years. But with this understanding, now new options can be made available. For instance, understanding and predicting growth may help advisors to end a dry spell earlier but also have an idea of how they can offset (maybe have a side gig for a while), hire (try hiring part-time before full-time), or purchase financial planning tools (starting with a less expensive platform) for the firm in a more efficient manner so they can stay in business until they are truly profitable after three to five years.

Right now advisors success statistics look something like 8 or 9 fails for every 10 advisors that get started in the industry. What if through additional software and lead generation automation, this could be lowered to six or seven fails? Or even 50% more successes!? Increased success rates for an advisor, the companies they represent, and ultimately for clients served would be a win-win for all involved.

This is our vision and what we’re working hard on at Couplr. What are your biggest pain points for lead generation for your organization and financial advisors? Drop a comment below or send us a note.

Best Regards,
Dr. Meghaan Lurtz & Derek Notman, CFP®