The Marketing Budget of an Elite Financial Advisor
Every elite financial advisor at some point has been a low-income advisor. However, we have seen financial advisors, through a focused commitment of energy and resources, achieve elite status in a relatively short time. We’ve also seen big producers not spend their marketing budgets wisely. It’s not an advertising budget; It’s “relationship marketing”. It’s more like an expense account used to strategically schmooze existing affluent customers, referral partners, and prospects.
The Oechsli Institute’s 2015 Elite Advisors Study found that 53% of Elite Advisors reported earnings of $1 million or more in the past year. This compares to the general population of advisors, of which 25% generated an annual income of $250,000 to $500,000, while 21% produced $250,000 or less.
The majority of Elite Advisors (57%) spend 4% or more of their gross output on marketing. So a million dollar advisor would spend $40,000 on marketing.
For the general advisor population, the question is how to mirror the relationship marketing activities of an elite financial advisor with only a fraction of the resources.
I would recommend budgeting between 2-10% of your gross revenue for marketing. New financial advisors with lower production numbers should consider investing closer to 10%. So a $300,000 producer has a $30,000 marketing budget and can do a lot more than a $12,000 budget.
A good starting point is to create a plan and budget around the following:
Upcoming social events in your community – Determine which of your affluent customers, prospects and/or referral alliance partners will attend. Budget: _________
Charity Events and Fundraisers – Determine which charities are important to your clients and referral alliance partners, and support them in the form of volunteer time, monetary donation, or both. Budget: _________
Intimate and “fun” client events you organize – Once you’ve engaged a specific customer at an event, your next step is to find a specific person in their sphere of influence to invite as a guest. Budget: ________
Social lunch and dinner – Schedule them on a quarterly basis. Select your lunch venues and dinner restaurants, and determine which customers and referral alliance partners you plan to invite. Budget: _________
Surprise gifts and delights – Think birthday presents, a birthday bottle of wine, a framed photo of the family dog, etc. These elements may seem unrelated to marketing, but relationship management and relationship marketing are inextricably linked. Budget: _________
Total budget: _________
| Production | Marketing budget (% of revenue) |
|
$0-100,000
|
minimum $10,000 |
| $100,000 to $350,000 | 10% more |
| $351,000 to $650,000 | 7 – 8% |
| $651,000 – $1 million | 5 – 6% |
| $1 million – $2 million | 4 – 5% |
| $2 million – $4 million | 2 – 4% |
| Over $4 million | 2 – 3% |
Plus, partner with a select group of wholesalers. Many wholesalers are willing and able to provide marketing assistance to Elite Advisors. To start:
• Complete your relationship marketing plan and make sure it includes customers, referral alliance partners, and projected leads connected to each site.
• Project the activity you plan to give each partner as it relates directly to the event they are attending.
• Set aside an afternoon for meetings with potential wholesale partners and schedule each wholesaler for a 20-minute time slot. Here you are selling your marketing plan and asking for help while creating a bit of competition. Inform each wholesaler that you will select four to five partners in
48 hours.
Review your marketing spend from last year and build your relationship marketing plan and budget accordingly.
Matt Oechsli is the author of Building a Success 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. www.oechsli.com
