Branding for Financial Advisors and Financial Firms

Branding and Building a Following for Wealth Managers, Digital Marketing for Financial Advisors

Below is a snippet of our article written in Kitces.com about branding for wealth managers and financial advisors.

In it we discuss

• Messaging and Content creation for RIA’s

• New ways of branding and describing your process and your story

• Leading with unique value proposition that’s truly UNIQUE

We also discuss this in our other article featured in RIABIZ.com

But what exactly is branding for financial firms?

While individuals will not be selecting their financial advisor, lawyer or accountant because of a nice website or logo, those tools are an indication of your investment back into your business and the sustainability of your practice for years to come.  We are big believers that modernizing your practice through your brand, messaging, marketing strategy and niche targeting can showcase your true passion, culture, messaging and unique services offerings. Learn about our Financial Advisor Marketing Programs. 

We recently wrote an article about how branding helped a water company stand out from its competition. Read our article on Liquid Death.

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As published in Kitces.com

EXECUTIVE SUMMARY written by Michael Kitces

In the early years of the financial planning profession, advisors were able to effectively differentiate the brand of their advisory firms by relying on language such as “trustworthy”, “knowledgeable”, and even “fiduciary”, to distinguish themselves from often-poorly-trained broker-dealer and insurance company salespeople. But with the rapidly growing number of CFP professionals who provide fiduciary best-interests advice for their clients, built on their years of experience in providing customized financial planning advice, these terms no longer differentiate a financial advisor, and instead simply describe ‘table stakes’ – bare minimum requirements that  any financial advisor is expected to possess. Which raises the question of how, with more and more financial advisors joining the industry or continuing to pivot away from products and into fiduciary advice, do talented advisors cope with this rising ‘crisis of differentiation’ and actually brand themselves in a way that stands apart from the rest?

In this guest post, Amy Parvaneh, Founder and CEO of Select Advisors Institute, explains the process she uses to help advisors develop an effective brand for their firm by identifying the valuable, qualitative factors that make an advisor (or their practice) unique, and targeting the right (not already overly saturated) client segment. By delving into these two key branding strategy elements, a financial advisor can create a strong, relevant message that can promote an individual (or their firm) and elicit client engagement from the exact type of clientele they’ve chosen to serve.

The first of these key branding elements is the firm’s “Opposing Category”, which consists of the firm’s qualities that go beyond the mere ‘table stakes’ that all advisory firms must have, and distinguishes the advisor as unequivocally unique from others, such as a unique financial planning process that the firm uses or a specific field of expertise the advisor has.

The second key branding element is the firm’s “White Space”, which includes any client segments that are underserved by other competing advisory firms, which, by definition, means there would be little competition to serve such clients (and ideally, will include clients with whom the advisor would enjoy working in the first place!).

While Opposing Categories can be identified by an introspective assessment of services offered and qualities that an advisor feels are special, White Spaces are best determined by examining current client characteristics, such as demographic criteria and less frequently examined psychographic traits (which describe a client’s habits, beliefs attitudes, and values), to spot where the advisor may have already found some White Space that can be delved into further. Once the Opposing Categories and White Spaces are identified, the advisor can then create an appropriate, personal, and impactful brand, and then use the brand to synchronize the business image, marketing messages, and operations processes.

Ultimately, going through the process of developing a brand message is crucial for advisors who want to hone their existing client segment (or shift their focus to a different segment altogether). By investing the time and effort needed to develop a relevant, genuine branding message, financial advisors will find their marketing efforts are more effective, as they highlight their specific value proposition to a specific (White Space) clientele to grow a successful practice in an increasingly competitive marketplace.

Vincent van Gogh is one of the world’s most treasured artists, and his most expensive painting, Portrait of Dr. Gachet (1890), sold for $82.5 million in 1990. But despite his passion for his work and immeasurable talent, Van Gogh was an obscure artist throughout his lifetime, unable to establish any meaningful following. He sold only one painting before he died, The Red Vineyard (1888), which sold for 400 francs in 1890 (less than $2,400 USD today!). The letters between the artist and his brother, Theo van Gogh, tell of a chronic lack of money, and existential difficulties with which Vincent struggled during his short career.

Similar to Vincent van Gogh, many advisors in the wealth management industry are also faced with an existential dilemma of sorts: One of intelligent, talented, and dedicated financial experts whose value may be overlooked and underappreciated, simply because they are not effectively marketing their specific value proposition.  Many financial advisors who are brilliant in their field have never fully understood or implemented a successful marketing campaign, some don’t feel they need one, and some simply never even realized that there are marketing strategies they can actively follow to promote themselves.

For many decades, financial advisors have marketed themselves with bland and undifferentiated messaging that does little to compel their audiences. How often have we seen or heard advisors use phrases to describe their value proposition, such as the ones below?

We are trusted advisors

We help you reach financial independence

We can be your quarterback for all your financial decisions

We provide comprehensive wealth management

In the past, when financial advisors were much more scarce, phrases such as these worked adequately for an advisors’ marketing strategy, because they really did differentiate advisors from the rest who were predominantly product salespeople. However, the ongoing commoditization of investment products and asset allocation is forcing more and more advisors to deliver this same trusted, holistic advice solution, with the number of CFP certificants increasing from 36,000 in 2000 to over 85,000 as of September 2019.

And given the tremendous growth of the comprehensive financial planning industry over the last two decades, advisors have needed to invest more and more energy and creativity into their marketing efforts to distinguish themselves from the competition. Just searching for “Financial Advisor” titles on LinkedIn results in over 550,000 results! Combine that with “Wealth Manager”, “Wealth Advisor”, and “Financial Planner”, and we’re up to about 815,000 and counting! Read about their services on their website or LinkedIn profile, and you can’t see much of a difference in what each does.

At the same time, “fee compression” is the topic du jour among advisors who fear their fees are perceived as untenably higher than the industry average by prospective clients. With the advent of robo-advisors and their saturation of digital wealth management platforms (as well as the focus on passive and index investing), it has become even more difficult to justify a 1% asset management fee, regardless of all the other ancillary services an advisor may offer to clients (or at a minimum, requiring so much in ancillary value-added services that it undermines the firm’s profitability).

Furthermore, given an ever-decreasing attention span in our society with the ubiquity of social media and digital lifestyles, prospects aren’t usually willing to listen to or read long-winded explanations and most blogs on advisor websites. Thus, antiquated marketing material with essays about the benefits of a particular wealth manager do not often compel prospective investors to engage.

And thus, perhaps a bit like Vincent van Gogh, these advisors are not able to effectively express to the outside world the unique qualities that make them different and worth engaging. Perhaps it’s the extra mile they will go for clients (the funerals they are arranging for their clients’ loved ones, the shoulder they offer to a client going through a divorce, the assisted-living facilities they are researching for their clients who are showing advanced symptoms of dementia, the family governance meetings they’ve arranged, and so on), or maybe it’s the specific service they offer to a target niche that make them unique from the rest.

The process of translating the valuable, qualitative factors that make an advisor (or their practice) unique, into impactful messaging that genuinely promotes an individual (or their firm) and that elicits client engagement, is called “branding”.

Historically, the term “branding” was generally reserved for consumer goods and technology companies. Companies like Apple and Nike used branding to build consumer loyalty and recognition – think of the line “Just Do It”, and Nike’s concept of empowering one’s inner athlete immediately comes to mind, right in line with their mission to “bring inspiration and innovation to every athlete in the world.” Or Apple’s award-winning “Think Different” campaign, which reminded customers of their mission to create innovative products based on seeing the world a little differently, with a poignant toast “to the crazy ones,” and the goal to inspire their customers to “think differently” in their own lives.

So how can advisors brand themselves to highlight their unique value, and move themselves away from being a commodity that trades on price, and into a brand, which trades on perceived value and selling of the intangible?

Read the rest of this article on the Michael Kitces website by clicking here