Business Development 101- A Guide for Financial Advisors

Business Development Strategies for Financial Advisor (2024)

At a point when we were at a crossroads in our advisory business we had the pleasure of encountering an unassuming advisor who was impressively converting leads at a remarkable rate. 

Get ready to be blown away:

There was nothing outwardly “special” about him. 

He wasn't any more intelligent or stylishly dressed than the average advisor who was struggling to make sales. He didn't have any obvious advantages from the outset, yet he had built a million-dollar financial advisory practice. And he was thriving.

You may be wondering, what is the X-factor that can propel seemingly ordinary financial advisors to extraordinary heights? Well, the answer lies in one simple phrase: business development. 

And if you want to unlock the same level of success, then taking a page out of this advisor's playbook is an absolute must.

To break it down for you:

Business development encompasses “ideas, initiatives, and activities that help make a business better.”

For more context, Sales Hacker defines business development as:

“A set of tasks and processes meant to develop and implement growth opportunities within (and between) organizations in a sustainable and profitable way.”

Get a hang on this skill, and we can promise you that your flow of clients will never run dry. But, of course, the real question is: how can you?

But let's be real, this is far from being a cakewalk.

Today’s post is dedicated to digging deeper into the lessons we learned about business development from our dear friend. These insights have helped us to achieve remarkable success in our causes, and we're excited to share them with you.

If you are ready, shall we?

Wait! Before you go any further, read this:

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Insider Secrets: Lessons In Business Development For Financial Advisory Practices

The Counter-Intuitive Truth About Growth

Before we dive into specific strategies for growing your business, let’s get this out of the way: Growth requires letting go of control. 

As a financial advisor, you likely pride yourself on being in control of your client’s finances and providing them with the best advice possible. That's absolutely commendable!

You're not going to like this, but…

When it comes to developing your business, you need to be willing to let go of some of that control and trust others to help you. And this can take many forms, such as:

Hiring a marketing consultant, seeking mentorship, outsourcing some of your administrative tasks, or partnering with other professionals in your industry. The outcome: more free time and energy to strategize and focus on what you do best - providing financial advice to your clients. And here's the kicker - providing the best services is the ultimate business growth hack!

Focus On Retention, Not Just Acquisition

Now, we know what you're thinking - isn't the whole point of growing your business to get more clients? Well, yes, but that's not the whole story. See, back in the early days, our founder would break his back and go the entire mile to acquire new leads.

It's a common mistake that many advisory practice owners make - they put all their energy into getting new customers and tend to treat the ones they already have as an afterthought.

The truth is, retaining existing clients is just as important (if not more so) than acquiring new ones. Here's why:

• It's more cost-effective: It's been estimated that it costs five times as much or even more to attract a new customer than to retain an existing one.

• Loyal customers are more valuable: According to research, a 5% increase in retention can lead to a 25-95% boost in profits.

• It's easier: It's up to 60-70% easier to sell to an existing customer than to a new one. 

So, how do you focus on retention? Here are a few tips:

• Build strong relationships with your clients.

• Provide personalized solutions.

• Communicate regularly.

• Show appreciation.

When you give retention a priority, you'll not only keep your clients happy and loyal, but they'll also refer you to their friends and family. And as we all know, word-of-mouth is one of the most powerful marketing tools out there.

Target Companies Linked To Your Target Market

It’s not rocket science:

Let's say you specialize in financial planning for young families. Instead of trying to market your services to everyone in your area, you can focus on companies that employ a lot of young parents. 

But here's the twist:

When you target these companies, establish yourself as an expert in financial planning for young families. Then include some perks: 

You can offer lunch-and-learn sessions or workshops for employees, and even offer special rates for those who sign up for your services through their employer. 

When executed properly, this approach allows you to establish a strong reputation within a specific market segment and build relationships with businesses and potential clients.

Unlock New Opportunities By Participating In Research Studies

First off, some context:

We believe there are still more questions than answers - and businesses and the general populace would be glad to get answers to some of these questions. That's where research studies come in. 

Participating in research studies not only helps advance knowledge in a particular field but can also open up new opportunities for your business. Just think of all the good press and buzz your findings might generate. Plus, such published findings would give your content marketing efforts a boost!

There's more:

• Access to valuable insights and data can help you better understand your target market. For instance, you may get access to demographic or psychographic data that can help you tailor your services to the needs of your target audience. This can be especially helpful if you're looking to expand into a new market or niche.

• Research studies often bring together industry experts and stakeholders, providing an opportunity for you to establish strategic partnerships, collaborate on future projects, or even land new businesses.

• You enhance your credibility which can help differentiate your practice from competitors and establish yourself as an expert in your niche.

Your mission:

Look for opportunities to participate in surveys, focus groups, or other research studies that align with your business objectives. Additionally, you can also reach out to academic institutions, think tanks, or other organizations conducting research in your field to inquire about opportunities for collaboration.

Attend Non-Industry Events

Here's an analogy

Attending events that are not related to the insurance and financial services industry is like fishing in a different pond - one where your competitors are probably not looking.

The crux of the matter is: 

If you keep fishing in the same pond, you're likely to catch the same type of fish over and over again. But if you venture out to a different pond, you have the opportunity to catch a different kind of fish - or even a bigger one.

The same concept applies to attending non-industry events. 

True, it's important to attend industry events to stay up-to-date with the latest trends and network with peers, but it's equally important to attend events outside of your industry. Why? 

Because you have the opportunity to meet new people and potentially gain new clients who may not have been on your radar or your competitors’ otherwise.

For example, let's say you're a financial advisor specializing in retirement planning, attending a local community event geared towards retirees or seniors could allow you to meet potential clients who are actively looking for retirement planning services, as well as other professionals who could provide valuable referrals.

Additionally, attending non-industry events can give you a unique perspective and inspire new ideas for your business. So keep an open mind.

Some examples of non-industry events you can attend:

• Local community events

• Charity events

• Sports games or tournaments

• Art shows or exhibits

• Book clubs or reading groups

• Cooking classes or food festivals

By attending these events, you have the chance to meet people from different walks of life and potentially make connections that can further lead to the development of your practice.

Stand Out In A Crowded Market

Let's face it - competition in the financial advisory industry is fierce and it doesn't look like it will let up no thanks to the rise of robo-advisors. 

And here's something else to ponder on:

“According to the 2021 U.S. Bureau of Labor Statistics data, there are more than 330,300 financial advisors employed in the United States with an increasing number projected over the next decade.” - Finance Strategists.

That's a lot of competition vying for the same clients and the same market share.

The onus is on you to think outside the box and carve a niche for yourself.

Instead of trying to be everything to everyone, focus on a specific type of client or a specific area of expertise. For example, you could specialize in helping young families plan for their children's college education. Or you could become an expert in socially responsible investing. 

It doesn't end there:

Stand out with a strong brand. Your brand is what people think of when they hear your name or see your logo - it's what sets the tone for your business and helps you connect with your audience. Ensure your brand is consistent across all your marketing channels, and that it reflects your values and your unique selling proposition.

Build Relationships, Not Just Transactions

Financial advisory is a people business. You're not just managing numbers - you're managing people's lives. And if you want to be successful, internalize the quote by Jeff Gitomer below:

“Value the relationship more than making your quota.”

Whether dealing with a prospect, networking, or hanging out with some folks in your community:

• Get to know people: Ask them about their families, their hobbies, and their passions. In other words, show genuine interest in their lives.

• Be authentic: In one sentence - don't be afraid to show your personality. So, be yourself, and let your personality shine through.

• Provide value beyond financial advice: For example, if a client is going through a divorce, offer them resources on coping with the emotional toll. What this does is show them that you care about their overall well-being, not just their money.

Use Shock and Awe

Okay, so maybe "shock and awe" is a bit of a dramatic way to put it, but you get the idea. You need to make an impact if you want to get noticed. One way to do that is to offer something truly valuable for free.

Before you protest, remember that “givers, get!” 

The premise is simple: 

When you offer something valuable for free, people will be more likely to trust and do business with you in the future. In social psychology, this is known as the law of reciprocity, and it's a powerful tool financial advisors can wield to their advantage.

And because we don't want you to self-sabotage with excuses, here are some ideas:

• Offer a free financial planning session. 

• Create a valuable resource: Create a guide, e-book, or white paper that offers valuable insights and advice for your target audience.

• Host a free event.

• Give back to your community.

Embrace Technology

Technology is disrupting the financial advisory industry, and if you're not keeping up, you're going to fall behind. And no, we're not asking you to become a tech wizard. 

Instead, we recommend you focus on the technologies that will help you deliver better service to your clients. 

• Use technology to streamline your processes - For example, you can use a customer relationship management (CRM) system to manage your client information and automate your client communication.

• Leverage social media - You can use platforms like LinkedIn, Twitter, and Facebook to share your expertise, build your brand, and attract new clients.

• Offer digital services - Following the Covid-19 pandemic, many clients are looking for more convenient ways to access financial advice. With digital services like video conferencing and online portfolio management, you can meet your client's needs and attract new ones.

• Use data analytics - Data analytics can help you gain insights into your clients' behavior and preferences which you can use to tailor your services to better meet their needs and increase client satisfaction.

Bottom line?

Remember, technology is not a replacement for human interaction. Use it as a tool to enhance your client relationships, free up your time to focus on more strategic tasks, and grow your business.

Final Words: A Guaranteed Path To Business Growth For Financial Advisor

We know firsthand how important it is to keep learning and its impact on growing as financial advisors. It is unequivocal!

And that's why we're thrilled to encourage you to join our on-demand sales training program for insurance and financial services professionals. When you enroll now you'll gain access to:

• The ‘objection-free’ sales process developed by Eszylfie Taylor, an active, MDRT top of the table producer (top 1% of financial advisors worldwide).

• A sales system predicated on shifting your mindset to solving problems vs selling products, resulting in fewer objections.

• A field-tested, proven system that has helped thousands of financial advisors around the world thrive!

• A deep library of content to help you address each pillar of the sales cycle effectively.

• A variety of business development and prospecting strategies to help you increase your activity and never run dry of leads.

Think about it: you'll be learning from the best in the business. These are the people who have been there, done that, and are sharing their secrets with you. You'll get insights that you can't find anywhere else, and you'll be able to apply what you learn to develop your practice right away.