A Defined Marketing Strategy Is Key to Growth for Advisors: Broadridge

What You Need to Know

  • Although advisors’ average marketing spend increased in terms of dollars, the percentage of revenue allocated to marketing was down.
  • Advisors with a defined marketing strategy are far likelier to achieve better business outcomes than their counterparts without one.
  • Less than a third of advisors say they’re looking to take advantage of the SEC’s new marketing rule.

Myriad challenges continue to pressure registered investment advisors and independent broker-dealers to find innovative new solutions to generate business. Among them, according to research released Wednesday by Broadridge Financial Solutions, are market volatility, increasing compliance and regulatory pressures, and a competitive landscape for wealth management service professionals.

Sixty-three percent of participants in Broadridge’s annual financial advisor marketing survey reported that they are actively seeking new clients, but only 43% said they are experiencing increases in inbound prospect requests.

“Despite evidence that staying on offense with a sharp marketing strategy yields business growth, especially in volatile markets, we’ve seen advisors shift back to defense and fail to allocate the right level of time, money and effort to their marketing strategies,” Kevin Darlington, head of Broadridge Advisor Solutions, said in a statement.

“That said, digital media usage is a bright spot and continues to show upward-trending success, as advisors double down on digital strategies and maximize the use of websites, LinkedIn and Facebook to generate leads.”

Broadridge conducted a quantitative, online survey between Sept. 29 and Oct. 10 among 401 financial advisors.

Defined Marketing Strategy Boosts Results

The survey found that although advisors’ average marketing spend increased to $17,433 in 2022, up from $16,090 in 2021, the percentage of revenue allocated to marketing was down to an average of 3.1%, compared with 3.6% last year.

In addition, only 10% of advisors said they were very satisfied with their marketing return on investment, down from 15% in 2021. RIAs tend to allocate more to marketing, spending $27,000 annually, while IBDs spend $9,700, according to Broadridge.