Given the growing number of financial advisors approaching retirement age, the financial services industry could use an infusion of more young blood to the business.
Yet, for new advisors entering the industry, getting their businesses off the ground is no easy feat – especially as they face challenges related to greater competition from the rise of self-directed investing and robo-advisors, and higher minimum client account levels at their firms.
And with more restrictions for businesses in general around cold calling and e-mail marketing, new advisors must find alternative, creative ways to build their client base.
“There’s no quick and easy way to be successful in this business,” says Aaron Arnold, an investment advisor with the Luft Financial team at HollisWealth Inc. in Vancouver. “It’s really just [all about] hard work.”
Mr. Arnold and two other young advisors – Jessica Arakgi, financial advisor at Nicola Wealth Management Ltd. in Toronto, and Dan Rudisuela, investment and wealth advisor at RBC Dominion Securities Inc. in Halifax – shared the approaches they used to build their practices in their early years.
1. Find good mentors
Ms. Arakgi pays credit to her mentors for helping her establish her career. She suggests that if younger advisors don’t already have experienced colleagues they can turn to for advice, professional associations can be a great way to meet and network with other advisors.
For example, Ms. Arakgi is an active member of the Conference for Advanced Life Underwriting and sits on its membership committee.
Many of these professional organizations need volunteers, whether it’s to serve on a committee or to vet examinations for certain designations, she says. Taking advantage of those opportunities is an excellent way to meet more experienced professionals in the business.
“I found that seasoned advisors really do like being mentors,” Ms. Arakgi says. “They started from the ground [floor] as well, so a lot of the time, they’re really happy to answer questions.”
2. Seek partnerships with other professionals
For practical reasons, it’s important to have a sense of the work other professionals, such as lawyers and accountants, are doing in order to improve your own skills, Mr. Rudisuela says. For example, speaking with an accountant can help advisors further understand how investment accounts are taxed.
Partnerships also play a significant role in building a referral network if you can demonstrate that you’re trustworthy and capable of providing good advice. “If someone is going to put their stamp of approval on you, you have to continually show that you’re deserving of it,” Mr. Rudisuela adds.
When looking to build connections with other professionals, seek those who are like-minded, he says. “If the intention is to refer to them and vice versa, you need to know someone believes in the same values you believe in, acts in the same way that you do and treats other clients and other relationships in the same manner.”
3. Offer financial education
One of the key ways Mr. Arnold continues to grow his business is by providing free financial education seminars in the form of university-style lectures.
In particular, he speaks to employees at fire and police departments, as well as local government staff.
“We don’t do any product pitching or sales,” Mr. Arnold says. “As a result, we’ve built up a good following and good financial karma. A lot of people who attend end up becoming clients because they’re impressed with the knowledge that we have and how we work with people to achieve their financial and retirement goals.”
By leading these seminars, Mr. Arnold meets more than 500 prospective clients a year. “That’s all the marketing that we’ve ever needed to do.”
4. Establish yourself as a thought leader
Mr. Rudisuela has worked to build his brand over the years by writing financial articles for local newspapers and a blog on his website. He’s written for his local chamber of commerce’s magazine on topics ranging from responsible investing to business succession planning. Content on his blog is shared via newsletters and LinkedIn. He also has plans to post this content on his recently approved Facebook account.
By developing original content, Mr. Rudisuela says he has raised his profile, built trust and authority – and attracted new clients.
“It continues to strengthen the idea that we are a positive voice in the community and experts in some respect,” he says. “Writing these articles continually builds the brand and also strengthens my name and my team’s name.”
5. Develop trust with clients
Before referrals can start trickling in, it’s important to create trusting relationships with your existing clients first.
“Part of building trust is that when you say you’re going to do something, you follow through [with it] in a timely manner,” Ms. Arakgi says.
Another central component of building that trust is moving beyond a transactional relationship to a more personable one. Providing a personal touch makes a significant difference with clients, she adds. “It really shows that you truly care about them, their families and their priorities.”
Ms. Arakgi begins each meeting by asking clients about their lives during the past six months. This is a chance to learn about any life changes or events they’re looking forward to, such as an upcoming trip. She can then follow up by sending a card, offering a gift or deepening the conversation further at the next meeting.