A Blueprint to Scale Your Wealth Management Business

Aug 1, 2022 | Guides

Despite the uncertainty of the markets in recent months, the wealth management industry has fared well — in fact, it’s growing. In the United States alone, one study forecasts the market to grow to $73.3 trillion by 2026, up 26.4% from 2020. 

There are a few reasons why. For one, there’s more diversity among high net worth individuals than ever before — thanks in part to the wave of IPOs taking place around the world. Meanwhile, people have more options for investing than ever before with the number of financial products growing every day. Digital growth is also giving rise to new wealth creation.

It’s a good time for financial advisors to think about expanding their operations. That means prioritizing the following:

Establish systems to scale your service

The wealth management industry is built on sound decision making, strong communication, and trust. If you’re considering taking on new clients, it’s important to ensure that you won’t neglect your current ones. That means relying on technical infrastructure to automate aspects of your operations.

The idea is to streamline repetitive tasks through automation. At a minimum, the solution should include capabilities for the following:

  • Integrations with CRM and other marketing systems
  • The ability to ingest data from a range of financial planning sources
  • A user friendly interface to guide financial planning
  • Tools for effective and expedient risk management
  • Clear and transparent invoicing capabilities
  • An integrated view into each client’s financial plan
  • A dedicated customer support team that can operate as an extension of your organization

With this infrastructure in place, financial advisors are better equipped to scale their businesses sustainably — without needing to hire more people or sacrifice customer service for existing customers.

The key to winning more business is to build upon a solid foundation for growth. If you scale too quickly, without the right infrastructure, you risk overloading your business, losing clients, and even damaging your reputation.

Get clear on your highest value customers

To win more business, one of the most effective strategies is to find more of your best customers. 

Who’s gaining the most value from your firm’s service? Who are your longest tenured clients? What customer traits result in the highest ROI for your business and why? Among what customer bases is your firm already generating growth?

With an understanding of these questions, your firm can better tailor networking and customer acquisition strategies for specific groups. For instance, you may notice that your firm attracts early career managers from pre-IPO technology companies. Digging deeper, it may be the case that clients are referring each other to your firm. You may also notice this trend dating back several years — and clients having the longest lifespan when they partner with your firm early-on in adulthood.

When uncovering trends like the hypothetical example above, it’s helpful to know why. An understanding of this picture can help you build more systematic marketing efforts, like forming relationships with certified public accountants that already serve your target customer, for instance. 

Reputation and referrals are key growth drivers for wealth management firms and businesses of all types. Understanding why your highest value customers appreciate your business, in addition to how they discovered your business, can help your firm scale up its successes.

Craft a compelling value proposition

Given the sheer number of options for wealth management, your firm needs to stand out from the crowd. That means defining a compelling, relatable, and clear value proposition. This message should speak directly to the qualities of your firm’s investment ethos and strategy.

Consider Rovin Capital as an example, a firm based in Southern California, which has centered its approach around financial peace of mind. Similarly, New Jersey based Glen Eagle has earned a reputation for its long-term, high-empathy investment approach. The two firms have implemented technology to better prioritize human touchpoints in their businesses. All interactions have value, along with the potential to be meaningful.

Whatever you decide is going to be your firm’s differentiating value, it should be communicated in a way that’s compelling, authentic, and true. After all, your goal is to attract clients who are the right fit for — and can grow with — your business.

Here are a few recommendations to help with your messaging and storytelling approach: 

  • A 2020 Journal of Business Research study on retirement planning intentions found that among  U.S. consumers, people with more self-control tend to exhibit greater follow-through on investing commitments. With this context in mind, firms can benefit from value proposition language that furthers their clients’ sense of self control — in other words, your firm will benefit from showing a clear path from point A to point B, using empowering and guidance-oriented language.
  • A 2019 Wiley study found that financial self awareness helps people make more sound financial decisions. Understanding this trend, firms can communicate a value proposition narrative that helps investors better understand their personal drivers and objectives.
  • A 2018 study in the Journal of Financial Services Marketing found, that, on occasion, investors fail to seek advice when they need it most due to overconfidence. One way to outsmart this trend is to proactively demonstrate the less-than-obvious ways that your firm delivers value. In your company narrative, be sure to explain what you wish prospective investors knew — and common pitfalls that may arise.

These tips aren’t an exhaustive list. As you dig deeper into academic research and understand your best fit clients, you’ll likely find more communication data points to inform your precise strategy.

Prioritize trust at the center of your business

Even for experienced investors, choosing a financial advisor can be an overwhelming process. It’s a big decision that requires a high degree of trust.

To strengthen this trust, firms will benefit from clearly defined next steps and operational processes at every checkpoint. It’s about providing a guided experience and establishing straightforward expectations. With this predictability, people are likely to feel a higher sense of stability when navigating a choice that is understandably hard — especially in today’s market.

Show that you care by meeting your clients and prospective clients where they are in their journeys. With so much out of our control in the world, you can build trust through the areas of predictability that are in your sphere of influence.

Final Thoughts

Scaling your business can be a rewarding experience. But you need to make sure that you take your best steps forward in a sustainable way. 

There are many different directions in which your wealth management business can evolve given that the industry is growing. 

What’s the future that you envision for your organization?

Learn more about CircleBlack

CircleBlack is an all in one management platform for the wealth management industry. You can think of it as an operational dashboard to better connect financial advisors and their clients around a shared perspective. The outcome is better collaboration.

To learn how our software can help you build, manage, and grow your wealth management practice, get in touch. 

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice.

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