The 5 Biggest Problems in Advisor Marketing

Brian Smith

In theory, the digital age promises to streamline marketing and simplify the process of connecting with new clients. But is that how it works in practice? 

In reality, the amount of time and money advisors spend on business development activities varies wildly from firm to firm. But even those who spend relatively little in hard dollars end up spending countless hours on time-intensive practices like cold calling, email marketing and networking.

  • Click here to create your free account on the Lasso Advisor Portal. If you want to get all the latest updates, you can follow us on Linkedin.

Digital marketing has truly changed things for advisors, but it has its problems. Here are the top five pitfalls of digital marketing for advisors (as I see them), and how Lasso—the new app our team is building—addresses each.

1. Unqualified Leads

If there’s one thing you can count on from every marketing campaign you run, it’s unqualified leads. Whether they don’t meet your minimum AUM requirements, don’t want to hire an advisor, or something else, unqualified leads can easily comprise 50% or more of the traffic from average digital marketing efforts.

And while you can always count on unqualified leads, you can’t necessarily say the same for qualified leads. It’s not all that uncommon for an advertising or social media campaign to result in zero new clients. 

How Lasso solves this

This is one of the biggest reasons we built Lasso: to create a pipeline of reliably warm leads who have indicated an interest in working with an advisor and have shared enough information to effectively “prequalify” them for advisors by letting you see how much money they have and what their goals are.

2. Overpriced Leads

Just getting a lead in the door can easily cost a few hundred dollars, and there’s no guarantee that lead will turn into a client. 

Services like SmartAsset and WiserAdvisor were created specifically to help solve this issue, but even with those services you are on the hook to pay for every lead—whether or not they turn into a client.

On average, advisors convert 21% of leads into new clients, typically costing them a few thousand dollars in the process. 

How Lasso solves this

Lasso is entirely free for advisors and prospects alike. Everything from browsing prospects to submitting proposals to signing new clients is entirely cost-free for you. 

With that being said, we recognize that the cost of marketing isn’t all hard dollars—the time you spend on marketing comes at a price, too. You can build a proposal on Lasso's Advisor Portal in less than 5 minutes. Given that the average cost of an advisor’s time is $150/hour, this means you can expect to spend less than $12.50 in time on each prospect. 

In essence, for the cost of connecting with one potentially unqualified lead elsewhere, you could submit proposals to more than 10 qualified leads using Lasso Advisor Portal.

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3. Unclear Next Steps

Marketing funnels are a popular topic these days, but the actual steps a person takes from stranger>prospect>qualified lead>client are largely unclear at most firms. 

Many firms cast a wide net and then bring prospects in through whatever means necessary, resulting in them essentially “making up” the funnel each time based on the needs of every prospect. Needless to say, the time cost of building a custom funnel for every prospect is far greater than having an established process.

How Lasso solves this

Our app comes with a marketing funnel built into it that starts at “qualified lead”:

  • Connect with a qualified prospect
  • You submit a proposal
  • Prospect accepts proposal and becomes a client
  • Click here to create your free account on the Lasso Advisor Portal. If you want to get all the latest updates, you can follow us on Linkedin.

4. Unmeasurable Effectiveness

How effective is your marketing? How many hours and dollars do you spend on each lead? 

Advisors overwhelmingly believe in marketing, which is great, but it can often result in blindly trusting that if they throw enough dollars at all things “marketing,” their AUM will go up. As a result, most firms have no idea how effective their marketing actually is. 

How Lasso solves this

Your profile on Lasso gives a clear picture of how effective you’ve been, tracking number of proposals submitted, as well as how many have been accepted and rejected. Just by logging onto the app, you can immediately see how effective your activities on Lasso have been in finding new clients. 

And because it takes so little time to browse and connect with prospects on Lasso as well as to build a proposal, using the app is not eating away hours of your day. You can even use it on the go. If you want, you can schedule a set amount of time per day or week for prospect-related activities. That way, you can easily track the time you’ve spent on it. 

5. Imbalance of Client Acquisition Costs and Client Lifetime Value found that the average cost of acquisition for a financial advisor to gain a new client is $3,119. Broken down, that number comes from $519 in “hard dollars” spent on marketing activities (e.g., advertising, producing webinars, COIs, marketing consultants) and $2,600 in time cost. When your time is worth $150/hour, all the hours you put into business development can add up quickly. 

Their study also found that it takes an average of three years to make back the cost of acquisition on a $500,000 client with fees of 1%. If a client does not stick around for three years, then you could end up eating that cost. 

How Lasso solves this

By streamlining your prospecting process and working within our funnel, you can dramatically decrease the amount of time and money you spend on acquiring new clients. 

The promises of digital marketing are real, but it’s important that you understand the cost—both in time and money—so you know for certain whether what you are doing is effective. Lasso gives advisors a clear view into what they’re doing and how well it’s working, so you can stop wondering if you’re doing it right and start growing your business.

  • Click here to create your free account on the Lasso Advisor Portal. If you want to get all the latest updates, you can follow us on Linkedin.

About the Author

Brian is the Head of Advisor Sales and has extensive experience in client advisory, wealth planning and valuation within the financial services field. He has experience working in the Corporate Development Group at M&T Bank as well as in Wealth Planning at the Glenmede Trust Company. Brian holds a BA from American University in Business Administration and is a CFP® professional.