BOSTON – Fidelity Clearing and Custody, the division of Fidelity Investments® that provides clearing and custody to registered investment advisors (RIAs), retirement recordkeepers, broker-dealer firms, banks and insurance companies, today released new findings from its 2014 Fidelity RIA Benchmarking Study1 on the best practices of "Marketing Leaders2," RIA firms3 with strong marketing and business development capabilities.
The study found that compared to Other RIAs,4 Marketing Leaders are 42 percent more likely to prioritize growth, dedicating more resources and spending 33 percent more – or 2.4 percent of their revenue vs. 1.8 percent – on business development and marketing. They are also seeing 40 percent more client growth, 23 percent more asset growth and 20 percent more revenue growth.
"This is good news for the 65 percent of RIA firms that do not feel as strong at marketing: investing in marketing can pay off, but it's not just about what you spend," said Mathias Hitchcock, vice president, practice management and consulting, Fidelity Clearing and Custody. "An investment in time can be just as important. Committing time to even the most fundamental areas of marketing, such as developing a plan or creating a referral process, can yield big gains when it comes to overall growth."
According to the study, investing both time and money in marketing and business development is helping Marketing Leaders excel in three key areas – their ability to plan effectively, ingrain their firm story and apply a disciplined referral process.
Marketing Leaders are planning for growth by implementing plans, aligning talent and maximizing their marketing mix.
- Marketing Leaders are more than twice as likely to have written marketing plans as Other RIAs and are much more likely to have assigned owners and specific deadlines for those plans. Marketing Leaders are also two times as likely to meet regularly to discuss business development goals, progress and recent developments.
- Seventy percent of Marketing Leaders use actual results to help drive compensation for business development staff, and they are more than twice as likely to agree their business development staff have the right skills and training to succeed.
- Marketing Leaders are more likely to leverage additional channels as part of their marketing mix. While communications, collateral and events are the top three activities used by both groups, 58 percent of Marketing Leaders are using all three. They are also more likely to use social media tactics and have been using these channels for 24 months or more, showing a willingness to be early adopters of new techniques.
Marketing Leaders are leveraging the power of a compelling and differentiated firm story.
According to one Marketing Leader, BakerAvenue in San Francisco, having your firm story reflected in all channels can help a firm stand out. "We express who we are through everything we do — from our branding to the space we sit in to the people we hire," said Jerry Luff, chief operating officer, BakerAvenue.
- Close to three-quarters of Marketing Leaders have created a clearly defined firm story that explains what differentiates them from other firms. Importantly, a larger percentage of Marketing Leaders have also specifically tailored this story to the needs of their target client profiles, potentially improving the chances their particular story will resonate.
- Marketing Leaders are more likely to agree their firm story is consistently reflected in marketing materials, and they are more likely to agree their clients and centers of influence (COIs) know the fundamentals of their firms stories.
Marketing Leaders are taking a disciplined approach to building a flow of referrals.
Marketing Leaders are far more likely than Other RIAs to rate their client and COI referral processes as advanced or fairly strong. They are also three times more likely to say they have a clear plan for proactive outreach for both client and COI referrals.
- Marketing Leaders are nearly three times as likely to communicate their firms’ target client profiles to clients and COIs and to follow up to stay engaged.
- Marketing Leaders also recognize that referrals are a two-way street. One in three tries to understand the clients of their COIs, while only about one in six Other RIAs do so.
Marketing Leader, United Capital Financial Advisers in Newport Beach, embraces COIs as a source of successful growth. According to Gail Graham, chief marketing officer, "we have a program that helps our advisors identify potential referral sources, supports them in developing a marketing plan and provides customized coaching to help them hone and deliver their approach."
To learn more about the study's findings, download Fidelity's report, Establishing a Growth Engine through Marketing and Business Development. On April 20th, the 5th Fidelity RIA Benchmarking Study on understanding the value drivers of your firm will be open for participation to Fidelity RIA clients and prospects. To participate or get additional details, please contact your Fidelity representative.
About Fidelity Investments
Fidelity's goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.2 trillion, including managed assets of $2.1 trillion as of February 28, 2015, we focus on meeting the unique needs of a diverse set of customers: helping over 24 million people investing their own life savings, nearly 20,000 businesses to manage their employee benefit programs, as well as providing nearly 10,000 advisory firms with technology solutions to invest their own clients' money. Privately held for nearly 70 years, Fidelity employs 41,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit www.fidelity.com.