Numbers Game

Despite having the tools, most financial advisers don't track sales leads

Highlights from IN Research's new study show why it's important to gauge where a firm is strong or weak in the sales process by benchmarking against peers

Oct 12, 2016 @ 12:01 am

By Matt Sirinides

In our 2016 InvestmentNews Financial Performance Study, which we conducted in partnership with the Ensemble Practice and which was sponsored by Pershing Advisor Solutions, we benchmark the client conversion rates for firms for the first time. Exploring that data can help any firm improve their chances for meaningful growth.


In an era where the most commonly used software at an advisory firm is the CRM — somewhere in the realm of nine out of 10 advisers have one, according to our most recent technology study — it's a shock to learn that sales leads aren't tracked by the majority. Just 38% of firms said they formally tracked leads at their firm.

We define a lead as having a "touch" or coming into contact with an individual who could become a client through a basic lead generation practice of the firm, whether it's an established referral network or a marketing activity.

A prospect, on the other hand, is a lead that the firm has gathered information on and has been validated as a qualified lead. By "qualified" we mean they meet the minimum of being able to afford your basic price/minimum fee or other measure, such as minimum assets, and meet your “niche,” whatever those qualifiers may be.

Among those firms who track leads, 72% did so at the firm level and 28% at the individual adviser level. The average firm converts 37% of their qualified leads — or prospects — to clients. The conversion rate for leads — what we'll describe as "warm leads," or those who could be a client — was 21%.

Do you formally track leads and prospect clients?

It's worth noting that these conversions use all leads generated in 2015 as the denominator, and the numerator is all of them that were closed by the first quarter of 2016. This means that any leads identified in the fourth quarter of 2015 had only three to six months to "close" — a quirk of the data that doubtless underplays the success of firms' conversions.

Many firms, after all, say it is not uncommon for a lead to take over a year to traverse the path to becoming a client. Common client profiles, such as windfall beneficiaries or near-retirees, may begin shopping far in advance for someone to assist with their new wealth picture.


Having too many leads who are not "qualified" prospects could mean that a firm has a marketing problem or a targeting problem.

Firms who have securely identified their ideal client have the least issue here, and they value the importance of knowing who that client is beyond having a high net worth or a willingness to pay a minimum fee. Not only will knowing help with targeting those individuals, it also will help advisers more effectively sell their services to them, because such firms know very precisely what it is about them that makes their service a good fit.

A useful exercise in further honing a niche is to tabulate as many common characteristics as possible among current clients and then tabulating all of the characteristics — demographic or otherwise — that a majority of them share.


Many firms, as we learned from our study, find marketing to be a serious challenge, with the majority professing that most of their efforts are only slightly successful in attracting business. While generating leads via marketing tactics may be a quantity issue for most, even those who get their message and brand recognized effectively find that targeting also can become an issue. One such adviser explained during a research interview that they don't wish to work with the vast majority of the leads they generate from their broad-stroke marketing — an outlier case that illustrates the issue.

But once leads are identified and become prospects via vetting and meaningful contact, the sales process takes over and winning the relationship becomes the ultimate concern. Getting that conversion requires communicating the value that the firm can provide and showing how the firm's service is differentiated — a huge concern for many firms. From the marketing materials that show the potential of what you do, to the final meeting where the deal is closed, the sales process can provide its own set of challenges. Are you worth the price? You have to actually show them what you're going to do.

Lead ratios and client conversion rates
Average Median
Leads generated in 2015 225 90
Clients per lead 4.3 2.8
Leads per professional 30 12
Leads per active owner 59 24
Prospects: percent of leads elevated to prospects 33% 30%
Closed: percent of leads converted to clients 21% 17%

Our studies can help identify where a firm might be strong or weak in the sales process by benchmarking against their peers. Are advisers generating enough leads? Are the right leads coming to the firm? Has the sales process been honed down to a science? Analyzing the data is an excellent way to identify how to best spur meaningful growth.


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