TD Ameritrade Institutional has unveiled Breakout Growth, a comprehensive, integrated practice management program that gives advisors the tools and guidance they need plus ongoing support.
Registered investment advisors (RIAs) devote their careers to helping investors plan for their long-term financial needs, but only a small minority have taken time to map out the future expansion of their own firms.
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Pursuing growth that’s sustainable over time requires a thoughtful plan featuring innovative business development approaches and, sometimes, a willingness to do things differently. It’s also about connecting with the right people.
The latest installment in the Breakout Growth program series, Advanced Strategies to Attract the Right Clients, features strategies and tactics RIAs can pursue to forge strategic relationships: attracting clients who not only bring in assets but strongly recommend the advisor to peers. Advisors can make their firms indispensable to a well-defined community of investors by using strategies across five key categories:
- Niche Marketing – Define ideal clients and tailor their marketing to that niche
- Branding – Create a brand that differentiates their firm
- Pricing – Develop a fee model that reflects the value advisors deliver
- Strategic Relationships – Cultivate clients who generate quality client introductions
- High-Impact Events – Host unique, engaging events that please clients and attract prospects
But it all starts with a plan. FA Insight in a recent study found that standout firms spent twice as much time on business development activities as those from firms facing growth challenges.2 The research firm said only a third of advisors achieved sustainable growth, and avoided growing pains, by following a well-designed plan.
"Over the years we’ve found the best firms had detailed plans for expansion, with strategies to increase assets in any environment. We encourage other RIAs to follow their example by creating a plan that can drive growth now and into the future," said Jim Dario, managing director, TD Ameritrade Institutional Products and Strategy. "With our Breakout Growth strategies and the support of our solutions consultants, we believe advisors can achieve tremendous results."
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By GlobalDataTo mark this year’s Breakout Growth program launch, TD Ameritrade Institutional has highlighted five strategies to help advisors kick-start their growth.
1) Define your ideal client
Advisors who focus on a well-defined niche can pursue faster, and more profitable growth while also deepening client relationships. By focusing on a specialized group, RIAs may become an established source within that niche and position themselves to receive more rewarding client introductions. A true niche is more specialized than just "women" or "executives," but rather sub-groups – say, orthodontists in Orange County or dentists in Miami – with whom RIAs have a personal connection.
2) Create a brand that resonates with your ideal clients
A great brand shows what makes a firm unique and communicates its values in ways that evoke positive emotions and strengthen client connections. Branding is the "special sauce" that attracts clients. Without it, advisors miss an opportunity to emphasize their strengths.
3) Cultivate more rewarding client relationships
Advisors can cultivate rewarding relationships by taking a planned approach to generating client introductions. Referrals are not enough. Rather RIAs should cultivate strategic introductions, which means the client introduces a prospect to the advisor personally. An Oechsli Institute study found 70 percent of affluent investors will offer unsolicited personal introductions to their primary financial advisor "if they like, trust and respect" the advisor. But advisors must be proactive in orchestrating these introductions and referrals.3
4) Deliver Engaging Experiences
Creating high-impact events is one of the most effective strategies by which RIAs can personally connect with clients, attract prospects and raise their profile within a niche. Events don’t have to be large or complicated — they can be as simple as inviting an author to speak to a group or hosting a wine-tasting — just so long as advisors create a social environment that also feels special. Some 72 percent of wealthy investors said they were more likely to introduce friends to an advisor if that advisor relationship were both business and social.4
5) Price services to reflect value
Pricing should reflect the value delivered by advisors and generate suitable margins for the firm. At 71 percent of firms, asset-based management fees cover a range of services beyond money management. So while this model is clear and easy to understand, "bundled" pricing can lead clients to undervalue services they don’t pay for explicitly. Among standout firms, 56 percent have introduced a minimum fee, versus less than half of growth-challenged firms.2 Advisors, though, must clearly communicate reasons for price changes to clients.
To Learn More
The Breakout Growth program features a wealth of resources and content, including modular tools and guidebooks, a series of live webcasts and in-person workshops, plus ongoing access to TD Ameritrade Institutional solutions consultants.
