Read original article by Investopedia here
Financial advisors today face a myriad of challenges in their daily practices. One of the biggest challenges that they face today is to plan for the future of the firm to ensure long-term success. Without proper planning, financial advisors can get stuck in the daily rut that makes it difficult to grow revenue and expand the business over time.
These are the five key growth strategies that you can use to help ensure a successful future for your financial advisory firm.
- Carve out a niche
Many financial advisory firms provide a broad array of services to their clients in order to address the largest possible market. While this strategy is effective in making just about anyone a potential client, you’re competing with every other financial advisory firm in the market with very little differentiation.
Becoming an expert in a niche market like serving retired athletes or the tech community for example, is often a better approach. By developing domain expertise in a small niche, you’re able to more easily differentiate yourself from others, face less competition, command greater loyalty, and potentially justify higher fees.
2. Build great customer relationships
According to several studies, the majority of people trust referrals from people they know, which means that referrals can be a great way to build a client base.
By going above and beyond expectations and maintaining a good relationship with your current clients, they are more likely to become brand ambassadors for your firm and offer up unsolicited introductions.
3. Don’t compromise on price
Price is a contentious issue when running just about any type of business, particularly businesses where clients are spoil with choices. In the financial industry, many advisors are concerned about raising prices for long-term clients, despite adding new services over time that justify those higher prices.
By clearly identifying how you’re helping clients achieve their long-term goals, price shopping becomes more difficult to quantify and there’s less client backlash from raising prices. The key is highlighting the ways in which your firm goes above and beyond typical services and achieves greater long-term value for clients.
4. Grow your company’s branding
Many financial advisors working with smaller firms tend to have pretty relaxed rules surrounding branding. For example, a financial advisor with an outdated LinkedIn profile could be sending the wrong message to clients by failing to indicate that they’re working with a given financial advisory firm.
By keeping websites, social media profiles, and other parts of your digital presence up-to-date and consistent, clients can be more confident in the financial advisory firm, its employees and partners. Maintaining an informative blog or posting educational content to social media like Facebook or Twitter can also help grow an audience and brand awareness over time.
5. Develop a unique and loyal network
Many financial advisory firms provide standardized services with very little differentiation from others in the industry. While client outings to grab dinner or go wine tasting provide great networking opportunities, there are many ways that financial advisory firms can go above and beyond.
By limiting clients and avoiding large and impersonal events, financial advisors can avoid occasions where people feel forced to network. Financial advisors should also be sure that at least a quarter of participants are strong advocates that are likely to talk up the business to prospective clients that have been invited.
The bottom line
At this age and time, financial advisory firms face a lot of competition, which makes it important to focus on growing your client base. By keeping these handy tips in mind, you can ensure a long-term success of your company.