There are many reasons why less than half of Americans have a financial advisor, but one of the major reasons is investors and consumers simply do not understand advisors and are unaware that there are professionals that cater to every conceivable niche of investor/consumer. But why are consumers unaware? In a word: marketing. More specifically so many advisors do very little or no marketing they are invisible to their target market, or any market in many cases. The advisors current client base and immediate referral network know of them, but they are hidden outside of a relatively small personal or professional network.
To be clear, this is not viewed as critical by many advisors (but it should be, and that’s for another blog post). Advisors have grown naturally by referral and at rates sufficient enough not to necessitate significant expense on marketing. Again, I have always viewed this as a mistake, but the reality is most advisors grow nicely by referral and life is good for them.
However, for consumers, investors and society at large this reality is a very big problem. The very people that need advisors the most are often wholly unaware that there are advisors ideal for them, usually in close proximity to them. Self-directed investors who blow themselves up financially very often will literally drive right by the office of an advisor that could have prevented any one of a number of self-inflicted financial ills. Investors who repeatedly make the same mistakes either through ignorance or lack of self-control create burdens and problems for others and the ripple effect can be devastating. The age-old example of not having life insurance when you have a family, then when the bread winner dies prematurely is the most extreme case, but there are many more ranging from falling for a Ponzi scheme, to selling in a panic and the list goes on.
A big part of the solution to this issue is marketing by the advisor. Advisors need to market themselves to fulfill the natural desire that most advisors have-and that is to genuinely help others. Advisors are reticent to seriously market themselves for a variety of reasons, most of these reasons are not founded in research, rather ignorance of how marketing works. The great news is there are a growing number of consultants, solution providers, even competing advisors that will share expertise and success stories. For example, an upcoming event The Advisor Thought Leadership Summit produced by industry marketing veterans Maribeth Kuzmeski and Marie Swift gives live video training for advisors, so they can see how they look on camera among many other skill sets over a two day event. Most RIA custodians like Schwab, Fidelity, TD Ameritrade and Pershing, in addition to many home office Broker-Dealers offer support services to advisors ranging from discounts on services to actual outbound marketing deployment depending on the firm and the advisor. Regardless of how an advisor avails themselves of the marketing tools, the bottom line is advisors need to market themselves if they truly want to serve others.