4 Ways to Grow Your Financial Advisor Practice

As a financial advisor and business owner, you have a lot on your plate. Managing the daily demands of running a business while simultaneously navigating ever-changing market conditions, maintaining strong relationships with your clients, and focusing on your business goals can be challenging. By following these four tips, you can move from maintenance mode to growing your financial practice.

#1: Specialize and tailor your expertise to your target audience’s needs

Rather than putting your practice in a “one size fits all” model, narrow down your focus to reach key client segments. Understanding that you can’t be all things to all clients is the first step in this. Ask yourself a very basic question: Who is your ideal client? Every financial advisor has superpowers – areas in which they specialize and excel. To find yours, analyze your book of business and financial expertise. Look for patterns and similarities that could appeal to clients in a particular profession, demographic, or life stage. Are there niche markets that seem to be a sweet spot for your business already? For example, you might be uniquely equipped to service retirement plans for educators, help underserved communities create generational wealth, or offer financial planning services for young investors. 

It’s also crucial to understand your target audience’s challenges and pain points. By studying trends and asking strategic questions, you can better demonstrate empathy and the expertise you can bring to a prospective client’s specific situation. This will help you and your practice stand out when a new client is interviewing several firms or financial advisors. After all, potential clients want to feel seen and understood by their financial professionals, especially when planning for key milestones in their lives. 

Clear communication and prompt follow up is also important. Through email communication, social media content, information on your website, and other ongoing communications you can provide valuable insights and thought leadership to aid prospective clients in their financial journey. 

#2: Focus on client retention and building multigenerational relationships

With an estimated $72.6 trillion expected to be handed down to heirs by 2045,¹ it’s crucial for financial advisors to build strong, multigenerational relationships with their clients and find ways to add value.

According to a recent Cerulli report, only about 20% of high-net-worth (HNW) clients choose to stay with their parents’ financial advisor, and roughly 1 in 4 look to change advisors within a year.² Advisors who focus on complex financial planning and increasing the tax-efficiency of wealth transfers – such as through grantor trusts, spousal lifetime access trusts, and strategic gifting – will be especially appealing to HNW investors.

Providing financial planning services for a flat fee can also create new revenue streams for lower AUM prospects or younger clients like Gen X, Gen Y, and Gen Z who may be looking to get started with a financial advisor. One day, these audiences could become your clients as their own assets grow or as they inherit assets from their parents. 

Another way to grow through your existing client base is to ask for referrals to their extended family and friends. Word-of-mouth referrals are very influential when prospective clients are looking for experienced, financial professionals. You can also leverage partnerships and centers of influence (COI), including accountants, bankers, attorneys, and real estate agents.

#3. Grow revenue by adopting a wealth management model

To stay competitive, advisors must be prepared to change their business model and incorporate more planning services to fit the evolving needs of investors. By adopting a wealth management approach – considering the client’s complete financial picture when offering guidance and recommendations – you can create more consistent revenue streams that lead to growth.

“The opportunity is massive for wealth managers,” says LPL’s Managing Director of Client Success, Matt Enyedi. “With all of the tailwinds out there — more money in motion than ever before, aging advisors with fewer entering the marketplace, and a greater demand for financial advice — advisors who are willing to adjust their value proposition have unlimited potential for growth.” 

On top of near-term growth, creating a systematized process for delivering wealth management could also result in a higher business valuation when you’re ready to exit your practice. “Having a repeatable approach that can live beyond you builds enterprise value,” says Matt, “because you’re creating a road map that can function over the entire life of your business. Someone could come in and take over the reins and continue to implement your processes.”

Institutionalizing your services and naming them as wealth management is all about creating a process. If you can describe your planning process to clients and help them understand the value you’re providing throughout their lives, you’re well on your way to incorporating more wealth management.

“Wealth management is often about institutionalizing what you’re already doing, so it becomes repeatable and scalable — turning casual conversations or services into the primary focus of your value proposition,” says Matt. 

Creating a wealth management process

• Create service models and client segments: You don’t have to offer all services to all clients. It makes more business sense if you don’t. Create different levels of service for different clients. For example, top-tier clients may receive comprehensive planning, while lower-tier clients may receive more basic planning. The type and amount of fees you charge can then line up with your service model.
• Fill in the gaps: Build a network of specialists and experts you can tap for services you can’t provide or don’t have time to provide yourself. While it’s helpful to understand these specialized services to know what questions to ask your clients, you can outsource specific work so you can focus on your own areas of expertise. It’s important that you continue to drive the processes of discovery and delivering the client’s action plan.
• Formalize your services: Create a menu of all the services you offer as part of your value proposition. Then, outline a process to show your clients exactly when you plan to offer these services. For example, a timeline of major life events can give clients a picture of what financial decisions they will make and need to plan for at different stages of their lives and what services you’ll offer at each of those stages.
• Put the plan into action: When it’s time to build out a plan for each life stage, either execute the plan yourself or connect the dots to the specialists. Rather than sending the clients to a CPA or attorney, instead, have a joint meeting to ensure you’re involved in the money management of trust funds or other estate investment management needs.

By transforming your business model to focus on holistic wealth management, you can position your financial practice for long-term revenue growth and value appreciation. 

“If advisors adopt an institutionalized process for providing advice and running their business, while at the same time leveraging technology and linking it to the very uniqueness of their human behavioral advice and coaching, they’ll be unbeatable,” says Matt. 

#4: Attract New Clients through Effective Digital Marketing and Brand Positioning 

Lastly, it’s essential for financial advisors to build a strong marketing plan rooted in digital marketing. Social media usage is increasingly valuable to reach targeted audiences with trusted content and market insights. Promoting your firm’s website through channels such as Search Engine Optimization (SEO), Paid Search, and Local Map listings can help your practice stand out when prospective clients search for experienced financial advisors. 

You can also use media to demonstrate your expertise through thought leadership tailored to your key audiences. Staying relevant with active and consistent messaging via email newsletters, online videos, and social media posts and keeping your website fresh are all key to a successful practice that is built for the future and poised for growth. 

Digital marketing and advertising require a commitment of time and budgets, and it’s important to follow your firm’s compliance guidelines. If you don’t have the time or internal resources to manage search engines, social medial, website content, or event online advertising, you may want to consider consulting with marketing specialists.

Footnotes

¹ “Cerulli Anticipates $84 Trillion in Wealth Transfers Through 2045”, Cerulli Associates, January 2022

² "Roughly 80% of affluent clients don't want their parents' advisor. Here's what to do about it.", Financial Planning, November 2023