Thinking about cutting your marketing budget as economic uncertainty looms? Here’s why financial advisor marketing matters just as much—if not more—in a market downturn.
As market volatility continues and recession fears mount, it’s natural for financial advisors to look for opportunities to cut expenses. Indeed, 23% of financial advisors reportedly decreased their marketing spend during the pandemic, according to data from Broadridge Technology Solutions.
A decline in revenue can no doubt be precarious. Yet if you’re an independent financial advisor, marketing often matters more when markets turn negative. Before slashing your budget, consider the potential implications of abandoning your marketing strategy.
Here are 3 reasons financial advisor marketing matters even more in a market downturn:
#1: Clients are looking for reassurance.
According to research from Qualtrics, after excessively high fees, poor customer service and lack of personalized attention are the top reasons clients say they’ve left a financial advisor.
Clients often need a little extra handholding when markets are in turmoil. Yes, this may mean an uptick in phone calls and in-person meetings. However, in some cases, you can alleviate client concerns simply by demonstrating that you’re paying attention.
For example, an insightful email or blog article can help convey necessary information to your clients and focus their attention on what matters. Meanwhile, you’re boosting your credibility with clients and prospects alike by communicating proactively rather than waiting for them to come to you.
You likely know from experience that client service and personalized attention matter more when investor sentiment is low. Committing to your financial advisor marketing strategy in a downturn can help you avoid client attrition due to poor communication.
#2: Clients may be unhappy with their current financial advisor.
A recent study by EY revealed that one-third of wealth management clients plan to switch wealth managers in the next three years. And the wealthiest clients are more likely to change their financial relationships than those with less to invest.
At the same time, most clients say they don’t hear from their advisors as often as they’d like, according to a 2019 YCharts study. Meanwhile, mobile searches for “financial advisor” have increased 75% over the last two years, according to data from Google.
These trends suggest how important financial advisor marketing can be in shaky market conditions. As unhappy clients search for a new advisor, those who continually invest in marketing are likely to rise to the top of the list.
#3: Consumers tend to reallocate spending to essentials in a downturn.
Consumers tend to change their spending habits in different phases of the economic cycle. For instance, discretionary spending typically decreases in an economic downturn as consumers shift their dollars to essential goods and services.
Of course, some clients may not view financial advice as an essential service. On the other hand, 65% of adults working with a financial advisor say they feel more prepared now for a potential recession than they did in 2008, according to a recent study by the CFP® Board.
If nothing else, market downturns present an opportunity for financial advisors to demonstrate their true value. A well-planned financial advisor marketing strategy allows you to position yourself as an authority in your field and effectively convey your value proposition to clients who may otherwise be on the fence.
Bottom Line: Investing in Financial Advisor Marketing Helps You Position Your Business for Long-Term Growth
Financial advisors are well practiced in coaching investors to stay the course when times get tough. And the same is true for your financial advisor marketing strategy. An effective marketing plan can help you weather a market downturn and come out better positioned for growth on the other side.
Indeed, marketing can be an investment of time and other resources. And being consistent in your marketing efforts is challenging when you’re dealing with the day-to-day pressures of running a business and managing client relationships.
Fortunately, you don’t have to go it alone. Consider delegating your marketing plan to a strategic partner like Left Field Insights. Our customized and subscription content marketing services can help you grow your business while you continue to focus on what you do best. Schedule a free consultation to learn more.