In a study conducted last year by iCapital Network with more than 800 advisers about their day-to-day business activities and ongoing practice development strategies, we learned that top-earning advisers – those consistently earning $1 million or more in annual income – were four times more likely than their less successful counterparts to be actively working toward becoming an industry thought leader.
The research indicated that just 13.4% of all advisers, regardless of income, were focused on positioning themselves as thought leaders, a statistic that helps to underscore one of the key differences between top earners and everyone else.
(More: Schwab study: Firms want people skills more than analytical prowess.)
Thought leadership has emerged as an important activity and one that is increasingly critical to remaining relevant in the 24-hour news cycle driven by online sources and social media platforms. At the same time, it can be difficult to measure the effectiveness of thought leadership initiatives and demonstrate clear links to revenue generation, which means it's still considered a nice-to-have rather than a must-have activity for many advisers.
So, what should advisers know about thought leadership?
MANY FORMS
Demonstrating thought leadership is not just about writing books or making TV appearances. Rather, it can take many forms and an adviser is free to determine the format that best showcases his or her expertise and insights while resonating with the target audiences.
Top-earning advisers cite many of the unique ways they are burnishing their reputations as leaders and experts: Advanced licenses and professional designations. Public speaking and appearances. Traditional publishing as well as blogging and vlogging. Educational workshops and seminars. Pro bono work.
For most, the topics central to their platforms are related to personal finance and investments with a few forays into associated topics such as insurance, estate planning and tax mitigation.
IT'S NOT SALES
While a strong presence as a thought leader can certainly help bolster business development efforts, it should not be confused with or substituted for a dedicated sales effort. The sales function is oriented around acquiring new relationships, increasing existing relationships and providing specific products and services with an eye toward generating revenue.
And while strategic thought leadership can be designed to support those same goals, in its purest form it should focus on educating and sharing informed opinions in a way that enhances the overall brand of the advisory firm and the individual practitioners. For greatest effect, thought leadership initiatives should be treated as a separate discipline that is implemented in tandem with sales.
KNOW YOUR AUDIENCE
The majority of financial advisers think about thought leadership activities as a way to reach potential clients and accordingly develop their content to appeal directly to individuals or families. While there is plenty of evidence that this can work, there are also a few reasons why it's not the most efficient use of resources.
First, there are already lots of other people doing it. Second, it's tantamount to communicating with prospective clients one-at-a-time. Third, it's a very narrow interpretation that leaves a significant influential market unaddressed.
(More: 3 common advertising and social media compliance traps.)
By contrast, top-earning advisers acquire virtually all of their new business through influencers – professionals like attorneys and accountants – and leverage the vast business networks of those influencers to create a powerful one-to-many dynamic.
As such, it can be considerably more valuable to craft thought leadership strategies to specifically target referral sources and position the adviser as a leader and expert in his or her respective field.
On the whole, top earners agree that channeling resources to thought leadership initiatives has contributed to their overall success and helped distinguish themselves and their practices.
Although thought leadership is just one of several strategic imperatives for leading advisers, the fact that top earners are disproportionately focused on it helps highlight the type of practice management activities that can contribute to overall success.
Hannah Shaw Grove is chief marketing officer at iCapital Network.
