A heavy theme at the Envestnet Elevate Summit 2023 this week included discussions over the latest industry insights and trends –and more specifically, growth in advisory practices.
Craig Iskowitz, managing director of the Ezra Group LLC, along with Alli Jordan, president and chief operating officer of LibertyFi, listed advice engagement tools, along with recruiting new advisors, as key investments to your practice. By adding client-facing professionals who have the relatability that younger investors seek from their financial advisors, businesses can grow while effectively servicing their clients, said Jordan.
Panelists also went back and forth on the question of adding marketing tactics for growth or depending on client referrals through center-of-influence (COI) relationships. Andrew Besheer, research practice director of wealth management for the Aite-Novarica Group, noted that in their data, Aite-Novarica found advisors were less likely to find success just by marketing their practice.
“This is a very limiting universe, whereas going after COIs is a larger pond,” he said. Unless a practice can affiliate themselves with a firm that has the notoriety to market, working through referrals is a sounder option for most practices, he added.
As digitalization and technology continue to trend upwards among clients, Chris Shutler, head of strategic development and market intelligence at Envestnet, mentioned digital marketing as a current option to successfully sell your practice. Past research at Envestnet found advisors listed digital marketing among the top three tools to implement, said Shutler.
Meeting younger clients at their current stage
Recruiting junior talent and securing younger clientele dominated conversations during the summit, and no less during a panel focused on growing practices.
Panelists made the point that most—if not, all—firms are currently trying to grab younger clients that will cultivate their investments with them throughout their lives. So, the question becomes, if everyone is vying for newer clientele, how can advisors set their practice apart from the others?
First, look to your current clients, said Iskowitz. Younger members in their family are likelier to trust a financial professional that has worked with someone their close with. “Have a conversation with the entire family,” he added. “How will the next generation know you exist and that they can trust you?”
Next, explore options that newer clientele are more likely to gravitate to, such as portfolios that are environmentally friendly and focus on social justice, low-cost exchange-traded funds (ETFs), and more budget-friendly approaches. Remember that these clients are not currently thinking about retirement, so realign your focus to meet theirs, reminded Iskowitz.
If your team’s size is able, delegate a junior or younger peer to work with these clients, recommended Besheer. “While they are willing to trust their parent’s advisor, they want to talk to someone they can relate to better,” he pointed out. “When you see those multi-generational teams, they tend to be very successful at keeping those clients.”
SEE ALSO: