Welcome to Financial Advisor IQ

How to Compete Head-On with Merrill Lynch and Other Big Firms

By Emily Brower Auchard October 20, 2015

There are nearly 290,000 financial advisors in business in this country, and many work for big firms with huge marketing budgets and nationally-recognized brands. Whether at big or small firms, however, FAs compete for business from essentially the same potential client pool.

So how, as a small-firm advisor, can you win out against big-firm rivals? Well, say veterans, instead of trying to compete head-on, you should focus on what’s different about you and your firm and how those differences can benefit prospects and clients.

“We’ll never have the marketing budget of a Merrill Lynch or an Edward Jones,” says Scott Ranby, an advisor with Kuhn Advisors, a firm in Denver that manages nearly $300 million in assets. His employers may not have a big marketing budget but it has a high-touch approach that has kept it thriving for 20 years.

Ranby says clients often come to Kuhn from big firms because they’re looking for better service. “They want more than a once-a-year visit,” he explains. “They’re looking for someone to manage their financial lives.”

Kuhn satisfies big-firm refugees by customizing every financial plan, knowing client portfolios “inside and out” and meeting with each client four times a year. “We may be imposing some constraint on our growth with this approach, but we are growing in a measured, conscientious way,” Ranby explains.

Arlington Capital, a fee-only firm in Arlington Heights, Ill., that manages $170 million, offers a level of transparency and consistency that big firms just can’t provide. “We don’t serve up platitudes,” says senior portfolio manager Justin Kumar. “We believe that telling clients, ‘We’ve got this under control,’ is not sufficient.”

The firm takes a proactive approach to investment and client communications, Kumar tells FA-IQ. The advisors aim to keep their clients updated on all their investment activity. To this end, they send out a weekly video email with commentary from the firm’s owner that reviews Arlington’s interpretation of market events and its resulting investment actions. “Even with market-volatility spikes, our phones are silent because we’ve already reached out through our weekly update,” says Kumar. “Our clients tell us they feel well informed about what’s happening with their financial assets.”

Mark Zoril

Flexibility, creativity and experimentation are not words typically associated with financial planning and advice. Mark Zoril, who talks more like a start-up entrepreneur than a financial advisor, left VALIC, a retirement-plan provider to school districts, a few years ago. He then founded PlanVision, a Plymouth, Minn.-based retirement-planning firm focused on small businesses and individuals.

Zoril’s model depends on high-volume client acquisition. To serve a large client base, he’s developed a system of technology that includes videoconferencing, rigorous client-relationship management and frequent feedback. He also works to understand the needs of the average middle-class investor. “I’m not trying to avoid personal encounters,” Zoril explains. “Most people do want some level of guidance, and we provide it — we just do it online.”

The model deviates so much from the industry norm that other advisors have asked him how his clients pay him. “I told them that I send a bill. That’s just a foreign concept to an advisor.”