Many financial advisers are curious about using a public relations firm to get their name out there and boost business growth, but most wonder whether the high cost really pays off.
Large PR agencies typically have minimums of $5,000 a month — though five-figure a month fees are not uncommon. Smaller companies that focus on the financial sector, some even targeting advisers specifically, often charge less.
The size of an advisory firm's overall budget for marketing — of which public relations is only one piece — is probably a good place to start to figure out if it makes sense to hire a professional. A firm that has an annual marketing budget of $10,000 or less would end up spending all of it and then some on public relations, and would have nothing left for events and other business development initiatives.
But some firms have found professional help with publicity invaluable as a gateway to growth and credibility as an adviser.
“I don't think there's any way I would have been able to be a part of even 10% of the media things that I have been doing if it weren't for working with a PR firm,” said Steven Dudash, president of IHT Wealth Management. “Those things have translated into more attention, credibility — and clients definitely seem to get a kick out it.”
IHT Wealth Management, created about a year ago when a crew of six Merrill Lynch Wealth Management advisers went independent, initially received many calls from reporters. Mr. Dudash said he wanted that to continue.
He hired PR firm Haven Tower Group, and it's helped to grow the advisory firm's national presence, he said.
Joseph Kuo, managing partner of Haven Tower, said growth is an important role PR firms should help advisers with, but there are many more, including when an adviser may be switching platforms or going through a planned succession.
Unanticipated regulatory or compliance issues also are among the situations that warrant turning to a professional firm, he said.
“The health of advisory businesses is very much related to their reputational well-being,” Mr. Kuo said. “Advisers who try to face situations with a clear public dimension may be penny wise and pound foolish to go it alone.”
Megan Carpenter, co-founder of PR firm FiComm Partners, said advisers should think about whether it's smart and efficient to spend their own time reaching out to media.
It takes a lot of time and tenacity to build relationships with reporters, but news stories and other reports can really help advisers be seen as thought leaders on particular subjects, she said.
“PR really supercharges your marketing plan because the media gives you so much credibility,” she said. “It adds a layer that you can't really buy.”
Tom Mingone, managing partner of Capital Management Group and a FiComm client, said the cost has been well worth it for his firm.
"You can't tie a revenue stream back to this investment, but the first thing people do when they consider using you is to Google you," he said.
Seeing the firm was recently quoted in the New York Times and the Street.com, for example, instantly gives the firm credibility, Mr. Mingone said.
"It makes people say, 'These people are legit,'" he said.
But Mr. Mingone said this is probably not something advisers can afford if they're just getting started in the business.
Brian Hart, who founded his own small PR firm Flackable about a year ago, said cost can be a prohibitive factor for advisers when they consider hiring traditional public relations agencies. His services start at about $1,500 a month.
Sometimes larger agencies that don't focus on advisers may offer cheaper, slimmed-down services, but they aren't sophisticated enough to bring results, he said.
Public relations strategies today need to leverage social media and expand an adviser's digital footprint, Mr. Hart said.
“To drive bottom-line results, firms need more than to send out releases and get stories to appear,” he said. “They also need to get to their target audience.”
But some financial advisers are finding success getting publicity all by themselves.
“We do all our own public relations, and we've had over 2,500 interviews with the media since 2000,” said Lou Stanasolovich, chief executive of Legend Financial Advisors.
The 21-year-old firm once considered hiring PR professionals to help them expand beyond the approximately 150 interviews its financial advisers conduct each month, but decided the benefits would not outweigh the cost, which was about $5,000 to $15,000 a month.
“We decided it was just too much to pay,” he said.
Legend's marketing director takes care of communicating with reporters to set up interviews, and the director has some help from interns, Mr. Stanasolovich said.
The firm sends out regular emails on the markets and other subjects to clients and prospects and includes reporters in those blasts.
Many reporters call proactively to talk with Legend professionals because they have had long-standing relationships. The firm also gets exposure through the National Association of Personal Financial Advisors, which alerts members to media comment requests, Mr. Stanasolovich said.
Other organizations, such as the Financial Planning Association and Investment Management Consultants Association, have similar media bureaus for members.