Acquiring new clients and retaining the ones you have are critical to your firm’s long-term success. Dedicating time and resources to business development is one of the secrets to building a more sustainable practice. The most effective RIA business development strategies are designed to help you increase revenues and fuel growth while providing maximum value to your clients.
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Understanding Business Development for RIAs
Business development is an approach that emphasizes the pursuit of growth opportunities both within and across organizations. Traditional business models are often sales-focused; organizations zero in on marketing, searching for leads and selling their products or services.
The process is largely transaction-driven and often impersonal. Business development, meanwhile, is more strategic by nature.
At its heart, RIA business development is concerned with building relationships and uncovering new growth opportunities. Yes, you want to increase sales and revenue. But business development goes beyond traditional sales methods and cold calling to realize those goals.
What Does RIA Business Development Look Like?
How you approach business development largely depends on your goals. If you’re unsure what you hope to achieve, it can help to ask yourself some basic questions:
- What value are you bringing to clients right now?
- How many clients are you serving now and how many could you comfortably serve without diminishing the level of value offered?
- Which business activities are most and least profitable?
- What does your long-term vision for the firm look like?
- What obstacles prevent you from bringing that vision to life?
- How is your firm different/unique from the competition?
There’s one more question to consider: What is your true north?
True north is the principle or set of principles that drives your firm’s decision-making. Understanding this concept and knowing the direction that you want to move in is central to growing your business.
RIA Business Development Strategies
Business development is a tree with multiple branches, each of which serves a different purpose. The principal areas of focus for RIAs include:
- Partnerships and networking
- Fostering engagement
- Managing client relationships
- Marketing
- Lead generation
Partnerships and Networking
Professional connections are a crucial resource for accelerating your firm’s growth. Expanding your network or entering into collaborative relationships can open up opportunities to build authority and credibility while gaining new referrals.
For example, you might decide to expand your circle to include centers of influence (COIs). Essentially, these are professionals in adjacent fields who could send prospective clients your way, and vice versa.
The key is choosing COIs who work with clients in a niche you want to target. An estate planning attorney who caters to wealthy investors, for instance, could be a valuable addition to your network if you’re hoping to acquire more high-net-worth clients.
Client Engagement and Relationships
Client acquisition may be central to your goals, but it’s important to nurture relationships with the clients you already have. There’s a remarkably simple reason why – happy, satisfied clients are more likely to remain with your firm and refer others to your business.
The power of word of mouth and client referrals can’t be underestimated, which is why it’s important to maintain an engaged client base. Here are some of the ways you can do that:
- Streamline onboarding processes to make them as seamless as possible
- Utilize tech tools, such as CRM software, which make it easy for clients to view their accounts through a personalized dashboard
- Encourage clients to stay in touch and respond to communications promptly, using the client’s preferred channels
- Show your appreciation through client events
You can also establish a referral program to incentivize clients to tell others about your business. If you’re not getting the level of referral traffic that you’d like, it may be helpful to send out a client satisfaction survey. Clients can respond anonymously – and honestly – to tell you what they like about your business and what could be improved.
Marketing and Lead Generation
Marketing and lead generation are significant components of RIA business development. A marketing plan tends to be most effective when it focuses on two things:
- A fully fleshed-out ideal or target audience
- Where that audience spends its time
Digital marketing affords opportunities to raise brand awareness and build authority across multiple channels. Your firm’s online marketing plan might include:
- Social media
- A professional website (powered by SEO or search engine optimization)
- Thought leadership and content marketing
- Email newsletters
- A podcast
- Collaborations with financial influencers or other advisors
- Digital ads
- Online seminars
An offline marketing strategy may include hosting in-person workshops for prospective clients, speaking at RIA conferences or participating in trade shows as a vendor. The beauty of business development is that you can test different marketing strategies to determine what offers the best ROI for your firm.
You can also take advantage of online tools to expand your marketing efforts and streamline lead generation. LinkedIn Sales Navigator is one option you might consider; SmartAsset AMP is another. These tools work in different ways, but have a similar goal of helping you match with qualified leads.
Frequently Asked Questions (FAQs)
How Do You Grow an RIA Firm?
RIA growth can materialize organically or inorganically. Natural growth drivers can include developing an effective marketing plan that targets online and offline channels, increasing client engagement to encourage referrals, and focusing on business development to build partnerships with other organizations. Acquiring an existing firm or buying another advisor’s book of business are examples of inorganic growth.
Why Should RIAs Care About Business Development?
Business development matters for RIAs who want to grow their firms and strengthen them from the inside out. Focusing on sales can increase revenue, but it may only take you so far. A business development plan gives you a blueprint for growth that considers your mission and values as well as the long-term needs of your clients.
How Is Business Development Different From Marketing or Sales?
Marketing and sales focus on conversions and turning prospects into paying clients. Business development can include marketing, sales and lead generation, but those aren’t the only things it’s concerned with. The overarching goal is to facilitate lasting growth through strategic means.
Bottom Line
RIA business development is not a one-size-fits-all approach, and it’s not intended to produce cookie-cutter results, either. When creating a business development plan, remember to weigh your firm’s unique needs, goals and value proposition.
Tips for Growing Your Advisory Business
- Automation can make running your firm less time-consuming, leaving you free to focus on serving your clients. Marketing is one of the easiest tasks to automate and a tool like SmartAsset AMP can help you generate leads on autopilot. This advisor marketing platform enables you to match with clients and gives you the tools you need to follow up. Schedule a demo to learn how to use it to grow your business.
- Compliance is an important consideration whether revamping an existing marketing plan or creating a new one from scratch. The SEC’s marketing rule outlines what RIAs can and can’t do when marketing their firms. Familiarizing yourself with compliance expectations can help you avoid any potential violations.
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