David Newson: Proven RIA Marketing Strategies for 15% Organic Growth

This podcast is brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com. What does it take to generate 15% organic growth for a billion-dollar advisory firm? Hi everyone, I'm business coach Steve Sandusky for Barron's Advisor, The Way Forward Podcast. My guest today is David Newsom. David has led marketing for multi-billion-dollar RIA firms and has developed and implemented innovative strategies to target high-net-worth clients and achieve substantial organic growth. In today's conversation, David outlines a case study approach for a $1 billion RIA firm that's aiming for 15 to 20% annual organic growth. He shares some actionable insights on how to set a foundation by deeply understanding the numbers. We talk about identifying the target audience of the future, and we talk about tailoring your marketing efforts to meet those ideal future clients where they are. David also emphasizes the importance of experimentation in digital marketing, the strategic use of content, and building an ecosystem that harmonizes with client needs. With that, here's my conversation with David Newsome. So I'm going to put you to the test here today.

Great.

So everyone wants to know, how can I be a better marketer? How can I kickstart organic growth? I thought what we would do is use, let's call it a case study here, where let's assume that we have a billion-dollar RIA firm, and this is a firm that wants to start growing 15, maybe 20% organically. What are some of the first steps that we need to think about here?

So I think the very first step, and I think this might resonate with listeners, is we have to start with the numbers. What I've found many times in marketing is we talk too quickly about tactics before we even talk about strategy. And before we even talk about strategy, we actually need to understand what the numbers are. And in this hypothetical scenario, if we're talking about a billion-dollar RIA, and let's just assume, okay, a billion dollars blended fee rate is like 70 bps, that's an annual revenue at 70 bps, $7 million a year. We want to grow that by 10%. Okay, we want to grow that by $700,000 in revenue. Or a 20% growth rate, obviously that's double at $1.4 million. And so that's a great place to start. And then I think the next place to start is, okay, who is your target audience and who is the target audience who you desire to have as a client? I think many times we think about who the ideal client is or who the client has been in the past. And I know we had this at Bingham Osborn in Scarborough where a typical client at the firm when I arrived was much older, like late '60s, early '70s, around $5 million investable assets held at the firm. And I had a mandate in marketing where we need a different type of client too, not a different type from a mindset standpoint, but a different type of client. We needed younger, wealthier clients, right? And we also had the benefit of being in San Francisco. There was a lot of tech wealth being created. Still, there's a lot of tech wealth being created in the Bay Area. And then how do we do that? That was the big marketing question. How do we actually attract this new type of client that is younger and wealthier? And what does that actually mean? How do they move through the world? Are they tech engineers? Are they senior executives in SaaS companies, right? Like we didn't really know where they were. So my role as a marketer was like, okay, let's back up. Let's set up a series of experiments and figure out like what that target audience is. So I think Going to a 60,000-foot view of this is, gosh, we want to grow by 10 or 20%. We need to understand who our ideal client is, who we want in the future, not necessarily who was the client of the past or the client of the present, but who is our desirable client of the future, and then figuring out everything that we can possibly learn about them. I think marketing, or good marketing, is the pursuit of deeply understanding your target audience. And by deeply understanding, it means putting your human-centered design thinking hat on, which is a fancy way of saying developing really deep empathy for your target audience and figuring out, okay, how do they move through the world? How do they make decisions? Do they even want to pay for advice? Right? That's another question, right? And then what's going on in their lives? There's intersectionality and things like that. I think from a strategic view, we need to understand what the numbers are, We need to understand who our target audience is, and then we can start figuring out, okay, where do we meet them? Really successful strategies aren't strategies where we are just pushing things in front of people's faces. Really successful strategies are creating magnetism and resonance in target audiences, especially high net worth and ultra high net worth audiences. This is a sophisticated consumer who moves through the world differently than others, right? They move through the world with a higher degree of expected privacy. They move through the world differently. And so when we are marketing to them, we need to make sure that we're meeting them at the right intersection of where they are.

I wanna talk a little more about this ideal client.

Sure.

So how do we come up with that? How do we find that information? 'Cause it's not as simple as, oh, let's just brainstorm and let's come up with a few demographics and psychographics and call it a day.

I think you start by talking to your existing clients. So one of the first things that I do in my craft as a marketer is, okay, I need access to clients. Let me talk to 20 or 30 clients that you've closed in the last 12 months. And that will give me an idea about where an RIA has resonance in their existing client base, because this is the important thing. Even though you might have an ideal client profile that you're going after, it still has to be a fit for the firm. You can't have a firm that's mismatched with a target audience because you're not going to actually find resonance. The target audience isn't going to get it. They're going to be like, huh, this just feels disconnected in some way. But to directly answer your question, how do you do that? You need to understand, okay, again, go back to some of the numbers. What does firm leadership think that their target audience is? And look at that. Also do some research. Okay, if this is a regional firm, what type of consumer exists in the region? Are we open to attracting clients nationally? Are we open to— can we deliver advice remotely? There's a whole host of considerations that go into how we're going to build a service offering. And then once we have a service offering and we have this ideal client profile, understanding where they are is a little bit of a Rubik's Cube to solve, where it's, okay, where's the firm at today? Where is the firm going to be tomorrow? Where does it want to be tomorrow? Where are the clients today? Who is the ideal client profile? And then really drilling into that. And sometimes that exercise is really tough for firms and advisors. They get all of the psychographics and the demographics spot on. Those are the easy parts, but it's really the next layer, the layer after that, where you're going to find what is actually happening in the daily lives of this target audience. Like, what do they read? And there's lots of research reports like Capgemini World Wealth Report is one, right? And also you need to Develop deep empathy for the end client. So if, let's say, the target audience is a consumer with $10 million or more, what publications do they read? Start reading those publications. How do they move through the world? How do they travel? How does someone with $10 million travel? And then your advisory teams can help you. Are they on NetJets? Are they doing fractional ownership at $10 million? Maybe not. Maybe they're just sitting in the front of the airplane still. But at what level are they actually thinking about NetJets? What time— at what point does it make sense for them to like, oh wow, now we're firmly in the space of private air travel. And I'm using that as a very broad example, even though I realize lots of people think this is not Robin Leach's Lifestyles of the Rich and Famous. Exactly. It's not that. It's not that. That was a moniker of the '80s, right? And certainly those things exist, but it would be foolhardy to like really delve into that space thinking that is the mindset because it's not. And another thing that I learned very early on in my career is, Human beings, all of us have a lot of shared components to how we move through the world. Getting back to target audience definition, those triggers are, for example, and one that's big in like the Bay Area, liquidity events, right? But does the end client ever talk about it, a liquidity event? Do you think tech workers are going around talking about liquidity all day? Do they use the term liquidity? Probably not, right? They're probably using terms like, gosh, I don't know what to do with my RSUs or for contractor, I don't know what to do with my NSOs, when to exercise exercise, how to exercise. Taxes is another big one. Over the course of my career, because I was running digital programs, I had to be at the front line. So I started having conversations with every single lead that was coming through. And over the course of my career, I've had more than like 1,200 of those conversations. So I guess to answer your question, it's you need to go out and talk to them. So go and create demand or create magnetism, draw the audience to you. And start talking to them. And then before you know it, you're in a very experimental phase of understanding who your target audience is. And it's not even a real high-cost way of doing it. There are ways through paid media to bring people to you, but then it's up to you to like, what do you do with them then? I think you have good conversations, understand where they are, and take really great notes. Like what's happening in their lives? Are they experiencing a significant life event? I don't think most people wake up consumers, you know, I don't think they wake up someday and say, oh, I need a new financial advisor. Like that rarely happens, right? Unless, you know, something happened really bad where they're like having some kind of an event in their life. But it's usually, oh, I have this problem, issue, question, right? Which is usually rooted in, gosh, I'm probably out of my zone of genius, right? How they earned their wealth is very different to them actually managing their wealth. So their zone of genius might be in SaaS products, right? But when it comes to managing their own wealth, and I heard this over and over again, gosh, when I had $500,000 of investable assets, I could do the whole low-cost index thing. When I got to $5 million, I felt like me pushing the buttons, it got real all of a sudden, right? And so they started questioning their own, am I experienced enough? Do I have enough knowledge? Do I know this part or this domain of expertise? Do I know this so well where I can push those buttons and feel good about those decisions? And I think the consumer many times like has questions. And so as marketers, we need to find out, or as firm leaders, we need to go find out what are those questions that they're asking? Where do they feel like they're outside of their zone and how can we educate them? That's why content marketing's so— that's why it works. You know a domain so well that you're creating content around that's useful. And so I think those are some ways that you can narrow that and figure out where that audience is and what those trigger points that give rise to the need for advice.

A firm at a billion, how many different personas could they actually effectively work with?

I've seen firms do a persona and do it well and can be incredibly successful. I've seen 4 personas be successful. Just be careful about persona creep.

And then if you have more than one persona, how do you position that on your website and in your public communication? For example, I'll see a lot of websites where it'll say who we work with and then it'll list maybe 3 or 4 different types. One might be we work with business owners. Another might be we work with pre-retirees. Another might be we work with corporate executives who are exercising stock options. And another one might be we work with retirees. And it's who don't you work with?

Sure. Yeah, I think the industry certainly suffers from we work 'we work with everyone' syndrome, right? Where it's, 'Oh no, if they have $3 million, if they have $1.5 million,' whatever your— if you have a minimum, whatever that is, 'we work with them.' And money is great for segmentation from a technical segmentation standpoint. It's a poor proxy for anything else. So how does a firm do that? I think delicately. Now, what's interesting is there are firms that if you achieve a certain amount of scale, you can serve Everybody. You have the expertise to serve everyone. Even smaller firms, if you have a core group of advisors that are like, but, and I think that's what it comes down to. If you have a core set of advisors that are like, no, this is my domain, pre-retirees, they're my people. And they serve them all day, every day. And they know the nuances that are going into that type of planning. And some folks might say, oh yeah, that's the simple stuff. Like, I, my domain is like over here where it's like super complex. And we're talking about business owners that are like now selling their companies and they have to worry about, Oh, if they're selling to private equity and like how to manage the deal and how to do this and how to do that. And then there's, oh, taxes and what happens here and what happens there. I think at the end of the day, it comes down to you can have a persona for the types of groups that you serve and you can even position that well on a website, right? There's obviously that feel when you land on the homepage of a website, is this firm for me? That's a question that any prospect is gonna ask themselves, is this firm for me? And if you allow them to find themselves on site easily, So from a user experience standpoint, can I find myself? Am I gonna see magnetism and resonance somewhere? Am I gonna see me in this site somewhere? And I think most consumers understand like, oh, and this is different. Some consumers will say, oh, I need a firm that is just for my niche. And you see this a lot in the MFO space, multifamily office space, right? Where a client is, are your other clients like me? And that is a very specific question, right? It's a multidimensional question, but it's a question about, ooh, do they look like me Do they look like me from an asset perspective? Do they look like me from a complexity perspective? Do they look like me from a how I live my life perspective? And that's what kind of gives rise to, oh, the single family office. Am I rich enough to actually have my own team? And I don't, I can bring all of that advice in-house and own it. And I would also challenge this concept of retirement. Like we've been using in the industry retirees and, and then I know for myself, like I'm Gen X and when someone says retirement, it just doesn't feel like it fits me. Right? It almost sounds like you're talking about my parents, my grandparents. And what's interesting is like our language evolves, right? So human beings, we evolve our language over periods of time. And I think this is one of those areas where we've got a lot of catching up to do.

Yeah, and what I'm seeing more people talk about, of course, financial freedom, but another one I see advisors mentioning is make work optional. And I think that might get to your point of, as long as I'm healthy, I'm probably going to be doing some kind of work, but at some point it's going to be the work that I want to do. Not the work that I feel like I have to do to earn a living to support my family. And so, this idea of, hey, we want to help you make work optional. That way, we're going to make sure that we fund your normal living needs and have that taken care of. And once that's taken care of, now you can do whatever kind of work that you want. It could be optional. You can retire if you want. You can keep working if you want. You can live the van life if you want. Which someone on a podcast I did earlier today mentioned their son is living the van life. Oh, that's great. Yeah.

Cool.

Another question related here to the persona is which comes first. And what I mean by that is if we're a billion-dollar firm, we're established. And if we want to go deeper with personas, do we want to start with looking at where is our core expertise right now that we think we do really well, and then see, okay, based on our core expertise, who are the people that would be most attracted to our core expertise, and then let's develop a persona around that? And/or would it be, who would we like to work with? Who are we passionate about working with? Whether or not we have a bunch of those clients today, whether or not we're really great at serving those people, and then maybe we'll try to build out an offering for those people. I don't know that it has to be one or the other, but any thoughts on how to think about that?

I think there are so many different ways to go about this that this is where personalities matter, right? I've seen firms where the people desperately want to serve a different clientele, but they're so entrenched with a specific target audience that they feel like they can't escape it.

And I've seen that too, because, and someone says, hey, we built the business with this type of client, but we think the world's changed and we really want to go into this other direction. But at the same time, we're really scared about, are we going to turn off the existing clients? Because then they look at us and say, wait a minute, you're like this new thing, and That's not what you have been. So do I need to find some new advisor because you're not me anymore? I've definitely seen that. And that certainly takes a great marketing flair to pull that one off, I would imagine.

It does. And I think what's interesting too about that is when you mention that, that to me sounds like a messaging challenge, right? It's not about we changed our stripes, right? And we are a different firm because we choose to serve a new group of people. That line of thought to me is a little scary, right? It's, oh gosh, like, why can't a firm evolve and change and meet the consumer of the future where they are, right? Because once upon a time, the existing client base was in a very different position when they became clients, right? And then as they have aged with the firm, they find themselves in a very specific— but having that messaging challenge to me is like, oh gosh, let's have that conversation with a client. Client, right? Let's talk to them like they want to be a— I would imagine clients want to be part of a firm that is going to be durable while they're around, and maybe their children, if that works out with the existing firm, become clients of the firm. But I would say if you were to explain to a client, look, just as our firm started— I'll give BOS as an example— firm started in 1985. 3 founders, okay? And it was like the very early dawn of registered investment advisory business where the word fiduciary was like new, right? And then when you said it, it had power. Everyone thought, wow, this is amazing and we can't wait to have this. Okay, fast forward, right? Then the next generation of advisor comes online and they're basically like taking over client accounts from Gen 1 and now we've got Gen 2 in there, but then they also have to develop business and fee, right? But that resonance isn't just coming from the same age group or people that look like clients of the past. They had to figure out who are the clients of now and who are the clients of the future. And I think that is, that's just a cyclical, what it means to be human. We all come into the world the same way. We all kind of exit the same way. And I think businesses are very similar, except they have the benefit of being multi-generational. They can just keep on going. And so I think if you have that conversation, I think what's bad about it, Steve, is you just launch a new initiative marketing-wise, a new target ideal client profile, and you don't tell your existing client base about it. You need to bring them along for the ride. I also think that they care, right? They have a vested interest, number one. But number two, I think they actually, at least the firms that I've worked with, have a deep level of respect for the firms that their clients have.

So now we've got this ideal client persona for this billion-dollar firm. What are some of the next steps that we need to be looking at in terms of how do we meet those people where they are?

One of the first steps, again, I'll take it back to the dollars, is determining how much is this going to cost us? What are we willing to contribute to grow, right? And that's a conversation. And the answer to that question is different for every firm. Some firms will say we're willing to spend a dollar for a dollar of revenue.

So like in this case, we were saying to grow 20%, we'd need about $1.4 million in revenue. So if you spend $1.4 million on sales and marketing to generate $1.4 million in new revenue and get a 12-month return on that, is that one way to think about the dollars?

That's a great way to think about it, and I think that's a great deal, right? Spend a dollar to get a dollar of annual recurring revenue.

It's not a dollar profit because it might cost you 50, 60% to service that.

Sure.

So it's certainly not a 1-year return on profit, but at least in terms of the revenue would equal what you spend on marketing. I think a lot of firms that I talk to, they'll look at it that way. They'll say, if I spend $1 on marketing, how long does it take me to get $1 of new revenue? And if you, like you say, yeah, if you can get it in 12 months, that's really good. Even if you can get it in 24 months, that's still good.

Sure.

Even 36 months might be good if this person's going to stay for 10, 15, 20 years. You do the math and looks really attractive.

Yes, the math works out to even spend a multiple of revenue per client. Historically speaking though, some firm leaders are perfectly comfortable with that. Others, that's a jarring number because they don't have a history of investing in marketing. And I also think what's interesting too here is we are rubbing up against what we're witnessing, the change in the industry, right? Like we are the change The acceleration of change in the industry is something we haven't seen before, right? You used to be able to say, oh yeah, we're a direct mail shop. We do direct mail. That's our thing. And it's very successful, right? That's changed because the consumer's changed, right? Is direct mail still successful? Yes. In fact, if you're not doing it, you might consider doing it, right? Lots of firms think, oh yeah, no, but there's some people laughing all the way to the bank on direct mail, right? But then the same thing is actually happening digital. And so if we're using a human-centered design mindset and engaging with like deep empathy for our target audience, or the clients that we want, then we would learn and know and understand that their world is digital, right? So we need to be participating in the digital world with them, otherwise we will lose out. So I think one of the ways to think about that is, okay, the same way that we look at managing portfolios, how are we going to manage this portfolio that we're going to dedicate to marketing? So I think the first step is determining What percent? And it doesn't have to be a percentage of revenue, to be clear, right? Lots of folks will say, will use it expressed as a percentage of revenue because like it gives you a number, right? Like it gives you a starting place and it also can, you can use that to benchmark a little bit, right? You can talk to other firms that are like yours. Okay. How much are they spending as a percentage of revenue? But what's most important is, and what's interesting here too, is are you spending the amount of money in your market that's going to drive the growth that you desire? Right? That's what it comes down to. You're going to spend more in New York City and San Francisco than you are in other parts of the country. That's a fact. That's like market dynamics, right? Which actually means, okay, so if you're a firm in Iowa, like your return on investment in marketing, your total return on marketing investment is going to be potentially a lot higher, right? Than a city like New York, right? Where everything costs more.

Yeah. And I think another way to think about this too is marketing doesn't have to do all the heavy lifting here in the sense that for many firms, their largest single channel of new business is referrals from existing clients. So if we're trying to grow 20%, maybe 5 percentage points of that 20% could come from referrals of existing clients if we're really diligent and really focused on that. So that might—

half of it could come from client referrals.

Half could. And if we're in a custodial referral program, there's another chunk that could come from that. So there are some other avenues. So it would be probably unlikely that a $7 million revenue firm, going back to the initial math here of $1 billion in assets at 70 basis points, probably unlikely that they're going to be spending 20% of $7 million or $1.4 million on marketing. So probably not 20% of the revenue. So we'll let some of the other things do the heavy lifting here too. But let's talk about some of these channels here.

As well.

I think you mentioned digital here. That's probably a good place to start. You've done a lot of work in that area, and perhaps where I'd like to start with the digital side is the website. And you've done a lot of websites. I've done a lot of websites over the years. What is state-of-the-art thinking when it comes to putting on a professional website today, a high-performing website that is going to be a great repository for capturing some inbound traffic and what are some things that we need to be thinking about to put together a high-performing website today?

Human beings, if you meet them where they are, they will actually corral around you and give you the growth that you desire if you're actually delivering something of value to them in real time, which is the beauty of digital. You have the ability to meet them where they are. So your question was all about digital website.

Website to start.

What goes into the website? And I'm going to contextualize this based on our example. At $1 billion, I think you need a custom website. And what that means is not a purchased template off the shelf that gets— I'm using air quotes— customized. The problem with that is the machines that are reading your website that are actually returning search results, or the algorithms that are like returning all different types of results, whether it's ads or search results or a whole host of other things. It will see that and it will also notice that site's code is the same as a gazillion others. And the moment that it sees that, I would imagine— and I'm not like an insider at Google, like where I know what their algorithm is, but I can just imagine you're not going to get the same quality score if you have a templated website where the— let's just think about it like architecture, like the foundation and the structure are identical to a gazillion other websites. And then like you just change some of the words. Or you change some of the images and some of the words, but like the rest of it, like the positioning of where things are, the menu bars, like all of the things like, oh, I just had to upload my logo and boom, my website's done. You might not want a website provider that is selling templates. At a billion-dollar level, you should go out and talk to a firm that knows what they're doing and especially knows like 10 years ago, I would have told you not to hire someone who knows what they're doing in the RIA space for a website, right? Because I would have said, ah, it's all— it's too much the same. Today, even the marketing industry surrounding the advisory space has grown and developed and matured where, yeah, you should actually go to someone who knows and understands the space because they are going to know your target audience in some cases better than you do. And that's what you want to pay for, someone who can help you figure out who your target audience is and build a website. Back to the mechanics of a website. You need a technical foundation to a website that's built for SEO, right? Which translation, you need clean code. You just need developers who know what they're doing.

And how effective is SEO today? Because we've got AI and I know when I go to Google and I type in a search, it gives me the Gemini AI response. And now there's zero click out there now where Google doesn't want you to leave the Google page. And so it, it seems like it's getting harder to get people to click on something from a search. So what's your impression of where that's at today?

Yeah, I have a client today that actually got a lead from ChatGPT because a user in the world was asking ChatGPT, like, what advisor should I be using? And one of the results was this firm right now. I worry about that because there's the window or the cutoff date of data for the large language models ends like at some point in the past. So it's not really relevant to like today, especially when it comes to the advisory space, because we know that things can change, right? There's contextual things that can change is like a firm strategy can change over 6 months, right? And that's not reflected in a large language model. So it's really backward looking. One of the things that's out there that I've heard is, okay, SEO's dead because AI can just create all this content really quickly for anybody. Hmm. At the end of the day, if you're still writing and publishing content that a human being wrote, you'll be better off. I just know that to be true because what's gonna wind up happening is they're gonna train the large language models to identify, or I think Google recently said like they are now figuring out how to watermark AI results or AI-created content. And so like, Let's look at Google's business model. They sell advertising. It is based on search, right? So the quality and integrity of search matters a lot to them. So if there's all of this pollution coming from AI, let's just call it content pollution coming from AI, and there's human content and the search engine can't tell the difference, then their business model is at risk potentially. However, if they watermark all of the AI, it's still left to what is the foundations of search engine optimization. There's some hardcore SEO folks, and I'm one of them, but I feel more strongly that really good SEO is simply demonstrating through the written word what your zone of genius is as an advisor or a firm. If you can demonstrate that over time, and how do you demonstrate knowledge, right? You publish frequently. Ask people in academia. You publish frequently, you write papers, you get that out into the world, you see how it, like, takes flight out into the world, or it doesn't, maybe it flops. And then it's also contextualized, so, like, search hap— doesn't happen in a vacuum, search happens over time. So if someone is asking Google a question today, it is contextualized by what's happening in the world today. A specific example for advisors would be, oh gosh, like, we're coming up on all of these changes in government, what does that mean on the other side? If you're writing content about what that might mean as a human being for your clients, for your target audience, then that's going to be picked up as like relevant, contextual, and like relevant from a timeline standpoint, like it's relevant to today.

If we went back 15 years ago, I think the conventional wisdom was you want to draw people back to your website, back to your blog post. You might post stuff on some social media. But then ultimately you want them to click on that and go right back to your website because you wanted to capture those people. Has it flipped today in the sense that because we've got YouTube, we've got Instagram, we've got Facebook, we've got LinkedIn, we've got all these really popular social channels where people are hanging out in those areas, and so now we're posting our content on LinkedIn, we're doing YouTube videos, and they're staying out there So has that at all devalued the value of a website, or has it made the importance of having an amazing website even more important now? Because that's still a place where you can draw people back, and in most cases, that's probably going to be the first place that a prospective client goes to check you out and just see how legit you are by seeing what kind of website you have.

It's funny, I can answer that question almost both ways and reason them out. But I'll come back to something that I've been saying since at least 2015. Your website is the center of your digital universe. It is the epicenter from which all other things flow. Now, does that mean you're also posting your YouTube channel videos on your website? No, that's not what I'm saying. But it is the place that if someone wants to investigate more and to learn more, It should be the epicenter of all of those things, and it should be really compelling. That is the place where you might use a retail example. Okay, you can go to a designer's website or you can go to a retailer's website. The retailer's website is making it really easy to consume lots of brands, but your experience on the brand's website is going to be better because it's like their brand. They own it. They are in control of the words. The pictures, the flow, the actuations of menus, how they like open up, how they like— what type of a menu. And like all of these things should matter in the RIA space. Remember, you are designing for a consumer that is very sophisticated. And if you have a website that's like Web 1.0, beware. Or if you have a website that's 1.0, and I think this matters, right? If you have a website that's 1.0 and your target audience is like a younger, wealthier client base, Not a great equation. You should probably update your website. Getting back to the, the question of like, where is the consumer these days? Yes, they are in all of these other places too, and you need to be there potentially. I'm going to caveat that just a little bit. There's a lot of talk these days about you have to do video, you have to do short-form video. First it was long-form video, now it's short-form video. Now you've got YouTube, but now you've got to be on Insta Reels. You have to be in all these places. And that is prioritizing a tactic over a strategy. If you have a strategy that is resonant with a certain target audience, that's the technology that they use, and you have talent at your firm that can magnetize that audience, great, do it. But what I've also seen is like folks create content, they launch it, and they wonder why it's flopping. But then they're like, ah, I'm doing video, it should be working. They told me it was going to work. And it's, oh no, that's not really how it works. You got to start with a strategy. I'm gonna double down on the website is still the center of your digital universe. It is the place where you can control every aspect of messaging, look, feel. And I think that there's also an opportunity still in the space where you can differentiate from an aesthetic, which is a foreign thing for RIA.

And that's a good question there too, which is how clever do you wanna be with your aesthetic? 'Cause I've seen some high-end RIA websites where it's like, are you trying to win a design award? Award with highfalutin designers out there that might say, wow, this is an incredibly creative site, we're going to give you an award. But to a consumer, I just wanted to get some information and you're making this kind of hard to get my information because yeah, it's pretty cool, but it's, I'm not sure where I'm going with this because it's just like too creative.

I would argue that's bad design.

Okay.

They failed to empathize with their target audience, right? If a consumer finds it cumbersome to navigate to what they need to get to, yeah. Form follows function, right? So those are basic design principles. If you have a website that is certainly current web versions, not 1.0, not even 2.0, but like somewhere beyond 2.0, and you have thought through how that site needs to function for them, then the design comes second. But I think you can do both. Let's think about things that are really Well-designed teapots, tea kettles, right? When's the last time you looked at a teapot? Now, sometimes you look at a teapot and you're like, wow, that's a really good-looking teapot.

I say that all the time.

Yeah, or not. But it's about function. It's about pouring water out that's usually pretty hot to achieve something like making a cup of tea in a certain type of way. That means like when you pick it up— door handles, that's another great example. Door handles matter, how they feel in the hand. I think we've all seen some door handles where you're like, I don't know how this works. I don't know how to get to the other side. All I want to do is grab the door handle and walk through the door. Same thing with like teapots. That's why when you pick them up, like they're made to have water in them and they're made to give you a feel for like how much water is still left in the pot and like how much water is going to come out when you tip it. That's all design, right? Someone thought long and hard and went, iterated on various versions to like get that right. So, you know, like when you start pouring from the teapot, it doesn't all just come out in one fire hose, right? They're designed to come out slowly so it's controlled, right? So you don't make a mess, so you don't burn someone. There's all of these different design questions around it. And I think the same thing we have to be thinking about for our consumer in the wealth management space. Who are we designing for? What do they care about? So let's say, for example, you're an RIA and your target, your ideal client profile is creatives. You better have a really beautiful website and you might want to have some of those little bells and whistles that make those creatives think, oh, somebody thought about this. And I think that's where it matters who you're designing for. And it also has to resonate with who you are. You can be a little aspirational as a brand, but beware the, oh, we're designing for people with $100 million, but our typical client's $2.5 million.

So let's assume that we've got a website now that matches up with who our ideal client profile or profiles are. Now, what are some things that we should be thinking about in terms of how do we actually drive traffic to that website to capture the contact information of these leads, or what are other ways to attract those folks? Let's again start with the digital side.

On the digital side, the goal is to create an ecosystem, right? And what I mean by creating an ecosystem is really good digital is about setting up experiments and tests and adopting a very agile methodology of always testing, learning, and refining. So if we think about it that way, and then we bring a funnel into it and we think about a funnel, And a typical marketing funnel has awareness at the top, top of the funnel awareness, middle consideration, bottom is conversion where the conversion is like someone goes from being a prospect to a client, right? That's typically done by either sales teams or individual advisors. But then when we think about like the marketing mix digitally and how that can be done, we want to be very broad with the types of experiments that we want to run. Now, obviously, if we don't have someone Let's just say we don't have anyone willing to do video, right? That's not part of our consideration set. That's not going to be one of our initial investments. But I think it comes from, okay, on the digital side, even for you build the website and you've got to get content on that website. If you have a website that says what you do and it says it well and it's communicating your value prop to your ideal client profile, but you don't have any content on it, you're not winning. Like content drives decision-making. And the reason why content drives decision-making for the consumer is typically they have an open question that needs solved. And it's that the discoverability of that content that leads to them seeking you out. Oh, you're an expert. You talk about this. You've written about this. Oh, I understand this. I want to talk to you. Now, one of the things that's changing over time is big firm branding used to prevail. And I think we're seeing a consumer shift. In consumers preferring an individual, right? And we've known for a long time clients hire advisors, they don't hire firms necessarily, unless like you're a really big box firm and there's like brand equity that's been established over 100 years. Like that's something else.

I'd love for you to explore. You just said consumers used to like big brands, but now they're branding around individuals. I'd love for you to explore that a little bit further because I think that is— if I'm a large RIA firm, am I branding at the firm name level, or am I trying to have individual advisors within the firm become mini celebrities themselves to attract business?

That, and I think you also need both. If you're a larger RIA, you need to manage the firm's brand and its content from a branded content perspective. But yeah, I think you should elevate the visibility of the individual advisor, because at the end of the day, that's what resonates with people. That's why branded podcasts sometimes can be challenging, right? Whereas if you had— what if you had an individual that's obviously tied to your firm, but like they had a podcast, right? It's a different angle. And it maybe it's even a shift, a generational shift. I can see that happening too. There might be a group of consumers out there that really trust the branded perspective. And then I think what we're seeing now is, and I know this to be true, the next generation being slightly distrusting of larger brands and more trusting of the individual.

You also mentioned experiments here. So give me some examples of what you mean by an experiment as it relates to the digital marketing space.

It's almost endless. So let's take Google Search Ads, for example, in the financial advisory space, mining for new keywords. So if we're talking about the way that Google Search is set up is, okay, you're— when someone does a search and they hit some of the keywords, it's going to return a search that's relevant to them in that moment. And it's complicated how it returns results, but let's just take one that's very common, a very direct search, someone who is actually looking for a financial advisor in the moment, and it's like financial advisor. And maybe they say financial advisor near me, which is going to like definitely return a hyper-local result from Google. You can test the types of ads that are going to show for your brand, right? And you maybe for financial advisor near me, you have 3 different types, right? One is going to be around how long you've been in business because maybe there's a consumer out there that cares about that. But you're going to test that against most awarded or one of Barron's top 100 firms or like some level of authority that's been granted to you from a third party, right? Maybe you lead with that. Maybe you lead with actually solving— let's say your firm's mantra, if you will, is we solve financial complexity for clients, right? So you lead with some headline that's all about solving financial complexity for clients. You would test those 3 things and see what you get. Now, sometimes that will surprise you. Like, you don't actually know. You can do a lot of research, but you won't know until it's out in the wild. And you're actually spending dollars against it. It's pretty easy to see what your competitors are doing too. Just sit there in an incognito browser and do some searches. You'll see a lot of my clients have been surprised to see that some larger RIAs are buying their smaller RIAs' brand as a keyword. And that's, oh, and that's a strategy that we call conquesting where it's, oh, I want to be in front of XYZ firm's prospects. Right now it comes at a higher cost because you're quality score, your ad quality score goes down because Google knows it's not— you're not the brand, right? But you're— so you're going to pay a premium for that. Another example of a test is, okay, we're going to run a LinkedIn campaign and we're going to test these 3 different types of creative, and they're going to be radically different from one another. One's going to be stock photography, one's going to be people from our firm, and another one's going to be text only. We're going to test those and see. One of the things that I found throughout the course of my career is sometimes the most beautiful ads don't convert. And it's sometimes it's the simplest ones that do.

That's why you experiment.

That's why. And that is exactly why you experiment, right? Because you will find, and it changes over time and it even changes over short periods of time. What worked 3 months ago or 6 months ago in digital might not work at all today. Right.

And let's use another common example here of say webinars. And let's say an advisor wants to do webinars on some educational topic. They want to use digital marketing to drive people to sign up for these webinars. Obviously, that's something that in recent years has been used heavily, and to some extent, maybe it's not converting as well as it did in the past. Do you have any thoughts on webinar marketing and driving traffic and getting people to register for webinars? Is that— how viable is that today?

I think it's perfectly viable today. Has it diminished? Are more people— is it more competitive? Yeah. Yes, absolutely. And I think that's the beauty of marketing really coming into its own, or we're coming into an era where we need to find resonance. And I know I say this a lot, but it's about magnetism and resonance with the people that we desire to have as clients. And so we have to keep that in mind, which means you just need to keep upping your webinar game. So what does that mean from a strategic standpoint? It used to be like, let's think of COVID our recent past webinars were like, long. Oh yeah, join us for an hour-long webinar. We're going to take you through— oh gosh, I think we did one at BOS that was like Prop 18, some esoteric— it only mattered to homeowners in California about this very specific proposition that was about transferring homeownership within families or something like that. And I might have that wrong, but an hour-long webinar. And it was amazing. People showed up, people were interested, they asked questions at the end. And I think if you were to put on that same webinar today, you might be hard-pressed to get a similar-sized audience or a similar-sized audience that's also engaged. I also think attention spans are on the decline. That's no secret. So if I were thinking through a webinar strategy, I would be thinking through, okay, what problem am I going to solve for somebody in 15 minutes? And this whole Q&A thing, like, how can you make it more interesting? I would run the webinar through a process of tearing it down, understanding what it does really well, and then really who are we designing for, and then rebuilding it and then testing different formats. Obviously this, this is not easy. You need someone thinking through a strategic lens. And I also know from being inside of an RIA every day, sometimes it's just hard enough to get the webinar up and going and attendees there from your existing client base, let alone leads.. But then there's also the production quality standards are also declining. The polish of a webinar doesn't have to be what it was even 2 years ago, so long as the content is delivering, right? So let's say like you want to do a 15-minute webinar on, I don't know, pick a topic, and then you say, okay, we're going to talk for 10 minutes and then we're going to get right to questions. And as part of the registration, you can submit your your question, right? And so maybe we take 2 and a half minutes and we just rattle off a bunch of answers. There are— what I'm saying here is like, there's a way to make them interesting and there's a way, there's a process through which really good marketers will think about that. And so it's not about do webinars work or not. It's about how are webinars evolving to meet our desired audiences where they are.

We're in the political season these days as we're having our conversation. What what else can we learn from political advertising in terms of what might be effective for financial advisor marketing/advertising/messaging, and what might we not want to do that political ads do? And I guess what I'm getting at there is obviously a lot of political advertising is extremely negative and it's divisive rally your group, so to speak. Let's talk about that from financial marketing and messaging. Should we be generic? Should we be up and positive because we want to be professional? Or do we want to be opinionated in some respect because we have a specific group of people that we're trying to reach because we've got our persona and we want to take an opinion. We don't want to just go right down the middle because who wants to hire you if you're just like right down the middle? In terms of an advisor. I don't know if there's— I'd love to get your opinion on that. And this is not a political comment, but it's just using that sort of as an analogy of, does this idea of taking a strong opinion, is that an effective way to message as a financial professional?

Before I answer the question about should I take an opinion, because I think you should and you can, and the successful ones will, right? I believe that. But before I get to explaining the why behind that, One of the strongest human emotions is fear, and we know that human beings have a fight-or-flight response that goes right down to just right around the brainstem. Like, it's so— like, they call it part of the reptilian brain. It's the fight-or-flight response, like, and you know it when you get it, right? You either want to run away or you want to fight, and fear triggers that response. Right? And it's certainly one of the strongest emotions, and it's one of the strongest emotions that is triggered in political advertising. And it also will work in any kind of advertising. If you actually run campaigns on fear, you will get a certain portion of the population that's going to respond to that the way that you want them to respond to that. Now, I would also caution what you're actually doing by creating fear in other human beings. Beware, because you're not just creating fear around the desired topic or area of interest that you're messaging about. You're creating a fear response in another human being, like you might have wrecked their day, right? You might have caused them to go from watching an ad to mistreating another human in the world, and I would just, instead of judging that, say, Is that the world in which we want to live? I have my answer to that. So when it comes to the world of messaging for financial advisors, I think we really need to think through— now, should we be all positive and Pollyanna about the world? No. Are there certain things that are happening in someone's life that they should have some element of fear about as it relates to their financial picture? Yes, and I think it has to be nuanced, but I think what we're witnessing in the political arena is like they are pushing the fear button, like the big red fear button all of the time. And what I think also happens is a natural human response over time is we begin to get desensitized. That sensor gets desensitized, and I think we've witnessed this. Like, we all start mistreating each other. We either tune out the world and we're like completely out of touch, or we don't Like we are overstimulated by the world and we choose to push back and away, or we lean into the fear and like different types of behavior comes out like aggression. And again, is that the world we want to live in?

Yeah. And I look at people like a Suze Orman or a Dave Ramsey or a Rick Edelman. These were really successful people who had strong opinions on financial topics, whether it's Hey, you should never have debt. You should pay cash for your house, pay cash for your car, don't go into debt, or pay your credit cards off first, or whatever the case may be. But they would have strong opinions. Or you should have a home mortgage because then you take the money that you don't put in the home and you invest that in the market, and you're going to get a better return on the market than you are paying down your mortgage. So there's ways to take opinions on topics where reasonable people can take the opposite side of your opinion. So that's the crux, I think, of my question is, does it make sense to take strong opinions on those things as a way to stand out from the crowd who is just being Pollyannaish and just going middle of the road? Well, you could do this or you could do that. It's like, no, I'm hiring you to give me an opinion. I may not agree with your opinion, but I want to know what your opinion is. And I'm attracted to people who do have an opinion. I'm attracted to someone who believes in something. And if I happen to believe what you believe, then yeah, maybe we're going to be a good fit. If I happen to believe the opposite of what you're saying, we're probably not going to be a good fit, but at least I'd like to know. Sure.

And I think my answer to that is yes. Like, I think you should, if you are a firm that can take a strong position and live with it, do it. Yeah. Because there will be that other person in the marketplace that feels another way and feels strongly. And if you can stand with the courage of your convictions on that, then own it and do it.

I say yes. Yeah, and I think another way to think about this too, another example would be there are some firms out there that are very focused on life planning and their website, their presentation, their communication, their messaging is all about, we really want to get to know you as a human. We want to help you in all aspects of your life that go beyond money. And so they take a strong stand. Now, I suspect you're going to agree with this, and that is that the best marketing is both an attractor and a repeller. And so if I take a stand for, hey, I'm all about life planning, and I position myself, that's going to turn off a lot of people. Say, hey, I'm not looking for a shrink here or a psychologist. I don't want someone to get touchy-feely with me. It's, I just need someone to manage my money and tell me if I can retire. And so if I see that on your website, I'm going to click off pretty quickly because that's not for me. So to me, that's— I have an opinion, I have a belief, I'm taking a stand. And if this resonates with you, getting back to one of your words earlier, it's, oh yeah, where have you been? You're speaking my language.

Totally. And I think advisors should be speaking the language of their clients. That is what really good marketing is all about. On the life planning That's a really great example. When I was at BOS, we had this like, how emotional should our communications get? Because that's like where it's headed, right? Okay, we do. Let's think about the industry, right? Once upon a time, it was all about investment management, right? Financial planning comes online. Oh yeah. Oh, investment management's been commoditized, right? And then you start hearing this, right? Investing is commoditized. It's all about financial planning, right? And now we talk about like holistic wealth planning. Right. And this is a marketing challenge that I see even today. Like, what's the difference between financial planning and holistic wealth management? We're starting to really get into a nuanced zone even within our own industry. Imagine what a consumer thinks when they see financial planning on a website and they see holistic wealth management on another and life planning on another. Right. However, there is the case to be made, like on the life planning website. Yeah, someone is going to be like, where have you been all of my life? I am so glad I'm here. And like the advisor can be like, welcome home. Right? Like, this is what we built this firm for. Like, welcome home. This is what we do. And I think that's valid. And I do think from a marketing standpoint, this is where like niche wins. That is a niche. That is a niche of the population that wants to feel seen, heard, understood on a depth and a level that the industry historically didn't really cater to. It was, oh yeah, let's sit down and we're going to review your statements. And I'll speak for myself right now. Like, I'm not that type of a wealth management client. Like, I don't want someone to sit down with my statements and have a conversation about money. I'm not interested. I know how that works. I also don't need someone talking to me about, hey, how's my relationship with my husband? Yeah, that's my business, right? However, I will say I was challenged once upon a time that I was not expecting to be challenged. If you'll allow me a personal story. Sure. My husband and I were living in San Francisco and we were preparing to start a family. Fast forward, we have a first grader. That worked out. And our estate planning attorney in San Francisco— I worked inside of a wealth management firm. I knew I had to get certain things in order. Okay, let's do this, right? I was getting term life insurance in place. I was doing all the things that I needed to do. And one of the things on my list was like, okay, I need to go see the estate planning attorney, make sure that all of our documents are up to snuff. And We get into the planning session and our attorney challenged our decision for how we would handle certain money with certain people if we were not around. Right. And the question was like, do you trust this person to make these types of decisions? And they were referring to a part of my background and things that like, I was like, oh, and the answer to that question was like, yes. But the question itself was a very uncomfortable question because it was like, wait a minute, we have already made this choice about a human being who's going to take care of our son in the case that we're not around, and you're asking me this very pointed question of, is this the right person to make money decisions based on something long in the past? But I appreciated it because it was an excellent question, but it wasn't for the faint of heart either. Like, someone could have been really rubbed the wrong way and stomped out of the office. I valued that because I value advice. That's really good objective advice. She was not attached to all of the family dynamics like that I was working through.

Great financial advisor will challenge you from time to time.

Oh yeah. And should. Yeah. And make you feel a little uncomfortable. Hey David, you've been torching money a lot lately. Everything okay over there?

Let's talk about some of the biggest mistakes that you see advisory firms make in marketing. I think one of the things you talked about earlier was a generic templated website. Sure. What are some other things that you see advisors doing, or perhaps not doing, that they should be doing that you would consider to be a mistake or a missed opportunity?

Yeah, I think perhaps the biggest missed opportunity or error that I have seen is tactics above strategy. And it's interesting, like, I think back to my, myself even 10 years ago Sometimes it's hard to tell the difference at times where it's like, oh no, that is a strategy. Video is a strategy. And I think I've come to learn that no, video is not a strategy. It's a tool and it's a tactic. Right. And same thing with digital, actually. So digital is a tool and a tactic. It's not a strategy. So let's be absolutely clear. While I love digital, it's not a strategy. It is a tool. And if you are a marketer, you should be managing your portfolio of not just your marketing budget, just the same way that advisors do asset allocations and doing allocations across it. You should also be allocating across various tactics, but it should all be in support of strategy. So if you have a firm strategy, like for this hypothetical firm here at $1 billion and you want to grow 20%, okay, so part of that mandate, you have a mandate now of growing by 20%. The strategy is how are you actually— the how is going to be some of the tactics, but like the strategic, the big strategic pillar behind it is how are you going to achieve that 20%? What is your process for getting there? And I think that's the biggest difference. It's not what tactics are going to get you there. It's like, how are you going to think about getting there and figuring that out? And then also, how are you going to tweak that as you go if you're not getting the results you need. And that's where all the tactics come in. Oh gosh, coming out of the gate, we're not going to do video because we don't have enough people at the firm that are, one, willing, two, talented, or three, even have the inclination to be on video or go through video training. It's not like everyone should be doing podcasting, right? Like when podcasting came out, oh, everyone should have a podcast. Maybe everybody shouldn't have a podcast, right? Maybe certain people should and others should not. I've also seen firms like— there are some firms like they do really well with the written word, right? That can be really powerful, right? But it would also— it can also be powerful for a marketer to look at that and say, wow, this person that's creating this content over here in the written word, we also have someone over here who can actually produce in-person content. And it's the person that's going to string all of those things together that's all going to be in support of the strategy that drives the 20% goal.

Yeah. And I think that's such an important distinction there, the strategy versus the tactics versus like the specific goal. I'll give you an example. We just recently released a podcast with Carly Dillon, who is with Brighton Jones, who also happens to be here in Portland, which is where you and I are having our conversation here today. And one of their big goals is to have 15% per year organic growth. And then they think about, okay, what's the strategy to make that happen? And it turns out that part of the strategy is where can we find that growth? And so they have 5 separate channels that they've clearly put goals within each of those channels and say, okay, we want X percent of that 15% to come from referrals from existing clients. We want X percent to come from our digital efforts. We want X percent to come from custodial referrals, and so on and so forth. So that then becomes the strategy of here's the goal. Now the strategy to hit that goal is is where are these places that we're going to play and how are we going to do that? And what are the tools that we're going to use to do that? What's the target clients? And they've got several personas that they target. So, there's all these different components of the strategy to hit the big goal. And so, your point is well taken in terms of so often we just jump to the tactic. Like I hear people say YouTube, for example, is very popular these days. We've had a handful of financial advisors who have had great success with that. And so it's easy just to rush into, oh, I think I'm going to start a YouTube channel because I see these two guys and gals having success. So I think I'm going to do it too. Maybe. Do you even like video? Right? Do you like showing your face in public? That sort of thing. And it's don't just do it because you see other people doing it. It's— and the way that I like to think about it too is once you start getting to the tactical level is you have to ask yourself, how passionate are you about that particular strategy? And I'll always use on a scale of 1 to 10. You're thinking about video, it's like, how passionate are you about creating videos, about having your face out there, about being on YouTube, about becoming a student of video marketing and trying to understand what is like the structure of a successful video on YouTube? And how do I tweak my thumbnails so the algorithm is going to pick up on that and that sort of thing? So it's like, it's real. If you're like a 3 out of 10, no way in the world am I going to suggest that you do YouTube videos, right? Because you got to be passionate about it first and foremost. So I think that if you're passionate about it, you'll be able to find a way to make it effective through the experimentation that you were talking about here earlier as well.

It's a great point. Passion plays a lot in the success of any strategy or tactic, actually. All right.

So, David, what have we not discussed here? Is there anything else that you're just dying to mention here that perhaps we haven't touched on yet?

I'll put a bow on some of the tactics strategies like website, what do I see that— not necessarily that folks struggle, but if you're listening and you're thinking like, gosh, what can I lean into or what should I definitely avoid? It's don't necessarily follow a tactic, right? Think through what your strategy needs to be first. Also, there can be change management issues wrapped up in that, right? Do you have the right people for the strategy that you want to execute? And that's a multi-year challenge. Same thing with, okay, website, I think Firms need to really work on that digital presence and also digitizing things, right? Have you thought about meeting your clients where they are, right? Do they really want that paper statement? And I know there's a lot of digital statements these days, but there's still a very large percentage of client statements going out on paper, right? And it's not all necessarily going to the folks that are like 70+ in age. Have you thought through what a digital strategy might be even for client service delivery, right? Because part of that can even become an extension of your marketing. So really good marketing, dynamic approach to reaching your target audience, which is also an extension of serving your clients well, because if you serve your clients well, while client referrals might be in decline, they're not zero. So you still need to do that well, right? So you can't ignore certain pieces of that. And I think that gives rise to a question of really good marketing means figuring out what the client experience is and delivering on that. And what I see often at much larger firms is we have someone operating with client experience without any marketing experience. They might come from a client service background, but marketers are the ones that are actually trained to understand human behavior and who you want to serve in the future. So why wouldn't you want to include them or have a seat at the table to help you figure out what that client experience can be because I would venture a guess like client referrals won't be dead if you're actually improving your client experience.

And what's the best way for folks to connect with you?

Our website is xnwdigital.com. David, thank you. Thank you, Steve.

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