This week, Financial Advisor IQ presents a Special Report on RIA Best Practices. Each day we will take a close look at a different aspect of running an RIA, offering well-honed tactics from industry leaders. This is part one.

An RIA needs to set itself apart from the competition. To an uninitiated potential client, each financial advisor is a clean slate. Only through marketing can a firm champion its differentiating message and grow its client base.

But RIAs must be able to back up their marketing claims, says Paul Tracey, CEO of RIA Growth, a consultant specializing in helping RIAs grow their business.

“If you say you’re a nationally-recognized RIA firm, you need to back that up,” he says. “If you say your strategy works in bull and bear markets, you need to back that up.”

He says RIAs benefit from having a unique proposition like doing everything in-house, so long as it is a legitimate claim. “You need to have JDs for estate planning, CFPs for financial planning and CPAs for taxes,” explains Tracey. The key, he says, is to have something unique and know how to market it.

Compliance needs to figure into an RIA’s marketing but it shouldn’t be seen as an impediment, Tracey says. “There are rules and regulations to protect the consumers,” he says. “If you have something unique that you can market and you can back it up, you will be fine. If you base your marketing on facts, you’ll be fine.”

Tom Wilson
Tom Wilson, senior lead advisor at JFS Wealth Advisors, agrees compliance shouldn’t be seen as a restraint on marketing, merely as a part of it. “It’s the reality of the world,” he says. “Compliance is first and last when it comes to marketing, for sure. It’s just the world we’re in, and we have a compliance officer who understands marketing is important, but protects us.”

Focusing on existing clients, messaging

Wilson says he focuses on his firm’s current client base for growth. Wilson says it is important clients are aware of all the services his firm provides, making sure he engages with core clients he refers to as “champions of our firm.” He says those conversations are separate from ones revolving around financial planning.

“Clients know we focus on their wealth management goals but they might not know we have a business retirement plan business. They might not know we have an entire tax department. They may not know we can manage estate and trust issues,” Wilson says. “You need to make the client fully aware of everything that you do.”

Media RIAs can use to market themselves include direct mailers, radio ads, targeted social media campaigns and podcasts. Tracey says using Facebook ads targeting a very narrow demographic — such as tennis-playing males in their 40s — is a particularly effective tool. Wilson emphasizes that an up-to-date website is essential — and it must be mobile friendly.

“We try to promote our technology with client portals, which we think is a difference-maker in today’s day and age,” Wilson says. “We focus a bit on SEO with online search engines to make sure we’re showing up in the right places when people are looking for a financial planner.”

When it comes to messaging, Wilson says his firm stresses they are there for their clients every step of the way. “We have trademarked the Lifetime Planning Continuum. It really encompasses our entire financial journey. We say, ‘We walk the road with you.’ We’re going to be there for the ups and the downs. Things are going to change based on what’s going on in your life and what’s going on in the market. Our financial goal plan is a living, breathing plan, in that it is going to change over time.”

Finding new clients

Tracey says there are three main ways for RIAs to grow their businesses: through acquisitions, references and referral programs. When it comes to referrals, Tracey notes RIAs should find an influencer with whom they’re acquainted, such as a CPA or an estate attorney, and find out if there are any clients in need of financial planning or money management services.

Tracey explains that the referral programs of firms such as Citigroup, Fidelity or Charles Schwab can generate hundreds of millions of dollars for RIAs who participate in these programs.

“Say Schwab has a client who needs a lot of handholding. Their financial consultant refers them to an RIA. The RIA takes over servicing of the client and Schwab gets a referral fee for that. There are about 100 RIAs nationwide who are in on these referral programs.”

Wilson says he focuses on providing great service to his clients to ensure new and continuing business. “If the majority of our new business isn’t coming from client referrals, then we’re doing something wrong with our existing clients,” he says.

Next: Top RIA Secrets to Retaining Quality Talent