For Martin Smith, the president of Wealthcare Financial Group, the best way to find new clients is still to pick up the phone and do the old smile and dial.
Smith, who started his advisory firm in Peachtree City, Georgia, in 2016, said he tried for a time using various online client-lead generators to build up his book of business. His complaints about
And when they did offer up good prospects, the names too often had been farmed out to multiple wealth managers, setting up a race to be the first to call.
"They have three advisors who are calling them because they've filled out a form," Smith said. "And sometimes people with assets will say they never asked to be a lead. They never asked to be contacted."
SmartAsset, Advisorist, Wealthtender, AdvisorFinder and other firms in
Other services coach advisors on ways to generate leads on their own using postings on sites like LinkedIn. No matter the method, the idea is the same: The internet, with its nearly unlimited power to forge connections, should provide freedom from the drudgery of building a book of business and allow wealth managers to devote their time to helping clients.
But
Return on investment
Michael Collins, the founder and CEO of
Collins said he understands the complaints about leads that don't go anywhere. Of all the client prospects he learns of through SmartAsset, only about 60% end up showing "signs of life," he said. Of those, only a quarter will meet with him. And then only 1 out of 3 will hire him as an advisor.
Collins said he thinks advisors can be too quick to blame lead-generation services when they don't get results. If they aren't landing clients, he said, it's often because they're giving up.
"I've trained some people on lead generation," Collins said. "Some people seem to think that if we just get the leads, the money will come over automatically. They misunderstand that you have to still work the lead."
Cautionary tale
Smith said he went through four or five lead-generation services, sometimes paying as much $300 per client prospect, before deciding he was better off going about the things more or less in the old-fashioned way. Smith, who is Black, said he has found his niche in working with other minority business owners.
Sometimes he'll meet clients at trade association events for people in the engineering or contracting fields. As often as not, though, he'll take the time he has for drumming up new business and spend it on LinkedIn and similar sites. When he sees a good prospect, he dials away.
"I do a lot of phone work," Smith said, adding that he has no aversion to cold calling.
"I pursue minority business enterprises and women-owned business enterprises," he said. "And my firm is an MBE. So that gives me something in common with them and helps to break the ice."
The counter argument
If they go through 33 leads before finding one client — achieving a 3% "conversion rate" — they'll have spent about $8,333. A client who has $1 million in investable assets and pays a 1% annual management fee will generate $10,000 a year. If that relationship is maintained for 10 years, the return comes out to roughly 120%.
"Cold-calling and other offline channels may have worked in the past," Carvin said in an email. "But, as a digitally native consumer base gets closer to retirement, we think it would be unfathomable for the wealth management industry not to leverage the power of the internet to grow AUM."
Carvin said SmartAsset started offering online referrals to advisors in 2017 as a way to build on its online articles and digital calculators used for tasks like tallying up retirement savings. Many of its client prospects now come from a
Visitors are asked questions about things ranging from their retirement goals and investable assets to their locations — an important consideration for people who prefer to meet advisors in person. Carvin said SmartAsset uses the resulting data to direct prospective clients to advisors who are most suited totheir needs.
"For example, an advisor may elect to only receive referrals to consumers that have between $100,000 and $250,000 in investable assets," he said in his email. "Or they may only want to target consumers that have more than $1 million."
Carvin said the names of prospective clients are sent to three advisors. He said SmartAsset offers no guarantees of how many leads it will generate over a given period of time but that its website postings and calculators are seen and used by tens of millions of people every month.
"Our super power is scale," Carvin said.
Other approaches
Jason Friedman, the founder of
That's what Friedman has strived to do with the website he launched in December. Advisors who pay him an annual fee starting at $600 get a profile on the site listing their strengths and specialties.
Visitors to the site can compare postings from a host of advisors before choosing who they think will be the best match. The key, Friedman said, is that it's then up to the potential client to reach out.
"So many of the companies out there are focused on solving this problem for advisors," said Friedman, who frequently
The owner of another firm, Jeremiah Desmarais, who founded
"It's really about your mindset," he said. "You have to tell yourself you are going to make this work and play the long game."
Rather than sifting through potential clients using online surveys, Desmarais and Advisorist put their energies into coaching advisors on how to use posts on LinkedIn, videos, podcasts and similar means of attracting eyes and ears. They also have an extensive
Desmarais said another goal is to set advisors up so they can take an additional 100 days off a year while still adding clients. He said drawing up LinkedIn posts to attract leads can take as little as 15 minutes or less out of someone's daily schedule.
The biggest hurdle for many advisors to overcome is the follow-up. Desmarais said planners are generally well aware that most prospective clients are likely to feel overexposed to sales tactics and thus be skeptical of anyone approaching with yet another offer.
One way to overcome that resistance, Desmarais said, is to carve out a niche that establishes expertise in dealing with certain types of clients. The specialties can run the gamut from working with doctors to veterans to women entrepreneurs. Doing this, Desmarais said, will help advisors direct their energies toward prospects who are most likely to be receptive to their offerings and give clients some reassurance that they've been approached by someone who's likely familiar with their particular needs and circumstances.
Desmarais said he's continually amazed to see advisors who spend months, if not years, studying to become certified financial planners and obtain other certifications but then put almost no effort into trying to build their books of business.
"We have seen people with no designation outpace veterans who have five different accreditations and still struggle to generate leads," Desmarais said.
Word of mouth
When it comes to some niches, though, referrals from current and former clients may still be the best way to drum up business. Jon Ekoniak, the managing partner of Bordeaux Wealth Advisors in Menlo Park, California, said he, too, ran through several lead-generation services before deciding he was better off going back to the tried-and-true methods.
Ekoniak, who declined to identify the firms he worked with, shared some of the common complaints.
"Fifty percent of the ones you call will not even return your phone call," he said. "It seems they are not going to the extra effort to distinguish the tire kickers from the ones who might actually want financial advice."
The services also didn't seem well-suited to finding the sort of ultra high net worth clients Bordeaux Wealth Partners, which has more than $4 billion in assets under management, usually works with.
Many are venture capitalists, corporate executives and private equity investors. They typically have at least $5 million in investable assets. In that tight-knit world, the next good prospect is most likely to come from one satisfied client recommending the firm to a business associate or acquaintance.
Ekoniak said he did receive assurances from several of the lead-generation services he worked with that they had plans eventually to go "upmarket."
"If they do and when they do, then we will look at them again," he said.
Amid such skepticism, there are plenty who find it hard to believe that an industry with such a need to reach out to large numbers of people will have much of a future apart from the internet.
Desmarais said that's especially true for advisors who are just starting out and haven't inherited an already-lengthy list of clients. They, more than anyone, have good reason to commit themselves to what he thinks is fast becoming the primary means of building an advisory business.
"All of our top clients are people who never stop trying," he said. "Technology can be intimidating to learn. But if you commit to thinking about how this skill will serve my community, my family and myself, then you will already be starting ahead of the game."
