Tech spending on digital marketing is just the first step

How well financial advice firms have fared over the past 10 weeks as workforces have shifted from offices to homes and client meetings have moved to Zoom and other videoconferencing platforms likely correlates with how well their executives have embraced technology.

It’s a no-brainer that firms already operating from the cloud and utilizing remote technologies such as digital signatures had a leg up in making this seismic change in normal operating procedures.

But certain firms have made out especially well in recent weeks.

Those are the forward-thinking planning firms that began investing in digital marketing techniques like search engine optimization, content marketing and dynamic website design several years ago.

Executives at these firms may not have known exactly how this would evolve, but they recognized that the successful adoption of digital marketing by sectors like the retail industry was enough for them to take the business plunge.

Now, as a plethora of potential clients are scrambling online to identify a financial adviser who can help them navigate the market volatility and economic devastation that COVID-19 has unleashed, firms with the deepest digital marketing trails are benefitting most.

The bad news is there aren’t that many financial advice firms with a fully formed digital marketing strategy, something that takes many years to perfect. In 2018, not even a third of advisers said they were using some type of digital marketing software, according to InvestmentNews Research data.

The good news is that many more plan to be in this envious position in the future. But those advisers should be prepared to invest both dollars and dedication.

This week’s cover story by senior columnist Jeff Benjamin, which was fueled by InvestmentNews’ 2020 Adviser Technology Study, shows digital marketing is the area where advisers plan to increase their technology spend the most. About 49% of the 269 firms surveyed said they will boost digital marketing spending in 2020.

The advice firms that are finding the most success with digital marketing strategies are those that have engaged and nurtured a community for years. But doing so, they report, isn’t easy.

One adviser, whose firm continues to perfect its strategy after three years, pointed out that if he had launched a Facebook marketing campaign when this all started, his firm would be getting cold traffic. And based on the costs of obtaining those leads and turning them into quick advisory relationships, he would lose money “hand over fist.”

Additionally, the firm would come across as pushy.

Instead, by building a community over time, firms grow relationship capital that puts the business in a position to turn leads into prospects and prospects into clients. This CEO said the audience has to “know, like and trust you,” and reaching that level requires discipline.

To be clear, successful digital marketing is not just about sending out a newsletter. This firm, as an example, conducted two webinars over the last month that led participants to a stand-alone offer of financial planning. His firm sold 37 engagements, compared to what he predicts would have been two at most if the firm offered that planning to a cold audience.

Digital marketing will pay off for other advisers, too, if they invest the time and resources to warm up their own online communities before the next momentous event strikes.