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Managing Your Practice
Strengthening Your Service Offering: How Brand Strategy Can Support Firm Growth
00:53:22
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- [00:03]
A
Hi everyone, this is Katherine Williams. I am head of practice management here at Dimensional Fund Advisors. In our work with advisors around the globe, one of the most enduring topics that we tackle with pretty much every client we speak with is this area of growth. Certainly there's a lot of inorganic growth activity happening, but absolutely there's a strong desire and momentum to drive organic growth in most of the businesses that we work with and certainly for the high performing firms that we see in our Global Advisor study. And that's really what we're going to focus on today. You know, when I think about some of the challenges that come along and the challenges that our clients often raise with us, when you think about why are you trying to grow, who are the clients you most want to work with? Both of those have evolved for a lot of the businesses that we engage with as their business has grown and gotten more complex, maybe they've added services, added area of expertise. All of that is kind of a moving target. And so we often start with, what's your strategy? How are you going to think about this and who might you need to help you develop that strategy? Execute long term, really have a true partner to help drive growth within your business. So with that, I am incredibly happy to have with us here today two individuals that are moving the needle for a lot of the firms that we work with and many that are listening here with us today. It's my pleasure to introduce first Lauren Hong, who is the founder and CEO of Out and About Communications and host of the out and about podcast. We're going to talk about a lot of podcasts here diving today. Lauren, it's great to have you with us.
- [01:42]
B
Yeah, thank you for having me here.
- [01:44]
A
We also have joining us today Megan Carpenter, who is the CEO of ficom Partners and the host of Growth Leaders of Wealth Management podcast as well. If you're looking for resources, insights, understanding, you can look well beyond the managing your practice podcast that we're on here with today. Meg, it's so good to have you with us as well.
- [02:04]
C
Hi, Katherine. Hi, Lauren. It's great to be here.
- [02:07]
A
So, Meg, I'm going to start with you and I love to. I always love to start with a little bit of a, you know, kind of an origin question. I mean, maybe you'll both tell me that you dreamed of being a marketing branding specialist from a very young age. You could surprise me that way. But I'm very curious, Meg, what brought you to this consulting space and particularly the desire to work with investment advisory businesses?
- [02:33]
C
Wasn't my childhood Dream. I actually thought that growing up, I thought that I was going to be an attorney. It turns out I married an attorney, but did not become one. I fell into this space on accident. When I was at university, I was looking for an internship, and I asked my sorority sisters, does anyone know of a paid internship? And I was introduced to a firm called John Hancock Financial Network, which was a large career agency system within the insurance broker dealer world. And the only reason that I said yes to that internship was because it was paid. Like, that was my single criteria. It was a marketing internship. I was a business major, so I didn't know anything about marketing and I didn't know anything about financial advisors. But it was really a very serendipitous opportunity for me because even at a young age, 20 years old, it didn't take long for me to fall in love with financial advisors. I was sitting in the office, I got to meet clients. I was helping with events. I overheard them in the hallway, and I heard the conversations happening between the advisor and the client. And I recognize very early on what an impactful relationship it is when you've got a good financial advisor. And so I've never looked back. I've spent my entire career working alongside financial advisors and advisory firms and helping them to ultimately serve more of the kind of people that they want to serve by being really good at marketing.
- [03:55]
A
Fantastic. Lauren, dreams and aspirations that led you to this space.
- [04:02]
B
Yeah, I wouldn't have forecasted, you know, looking back, that I'd be where I am today, but my background's actually in graph design. That's what I did my undergraduate in. So when I got this company going, I think like a lot of companies, you don't really know who you're going to end up working with. You've kind of got to, like, test it out and figure out who your target market is. And we stumbled into working with an ria and we honestly, we did a really good job. And from a branding perspective, I saw this super unique challenge because everyone kind of looks the same. It's like buttoned up, you know, blues, grays, blacks, and from a color palette standpoint. But I really quickly learn it's just very a human business. And that's a really unique challenge. And it's honestly one of the challenges that attracts so much of our talent to work with us, because they like that challenge of how do you not make everyone kind of look and sound the same, but to really stand out in this, in this space? So we did a great job with that account. And Then it just caught fire. And then you fast forward, I were I think 14 years in business or started the company was when I was in my twenties. So pretty much my whole career like Meg has been, you know, in this space has really been servicing the financial services industry and in particular working with a lot of firms.
- [05:12]
A
Well, and it's such a good point you've just made and we're going to talk a little bit further about this, this idea. You know, we're not, we're not making widgets, right? The epitome of sort of the human endeavor and all the emotions and all the intellect and everything that happens in that exchange of the relationship between the advisory business and their clients. So I appreciate you, you sort of calling that out. You also use the word branding. How do you think about the difference between branding and marketing, specifically? Lauren? What comes to mind when I ask that question?
- [05:40]
B
I'd say that the brand in particular directly plugs into the business strategy for where you want to go. So if you're able to answer questions about who your target market is, how you want to show up, you know, what makes you unique, the brand essence, specifically talking about the visual identity, the look, the feel, the photography, the video, all of that, as well as the voice and tone, how do you sound, you know, are you more technical, are you more casual or what have you? It's basically encompassing that with, with key guidelines so that as your, your company grows that it doesn start to frail. Like that brand is really an asset and that anyone that's joining the team, they can feel that, you know, and so it's, it's a constant that you have as a, as a firm.
- [06:22]
C
I think it's something branding, marketing, public relations, like all of the things that you could do are often not widely understood in our space. It feels like this nebulous, undefined, unclear, sort of like bucket of work. It's just a great opportunity for people like Lauren and I, but also for advisory firms who are looking to marketing as, as a greater driver of growth in their business. So I often think about things from like the business sense because I'm a founder and entrepreneur, I go like business first. And so I think of a brand as an experience that your customer has with you. And so if you think about that experience, all of the touch points, every interaction, every piece of communication, how you make someone feel to me is very much the brand. And oftentimes people, advisors, firm leaders think of a brand as a logo or a brochure or a website, those are outputs of a brand. Or the collateral pieces. But brand is much more than that. And so when we think about brand, it's that experience. And so we want it to be highly strategic and we want it to be quite authentic to the advisory firm. And then when we think about marketing, I think about marketing as a lever that you pull in your business to drive net new asset growth. And there's a lot of ways that you could do that. Marketing is one way that you can pull net new assets into the business. But marketing is really about the external, proactive, outbound communication that you are putting out. All of your digital assets, your social media assets, how you're showing up in the community, every physical and digital touch point that you have to let people know who you are and to attract them to your business's marketing. And then sales is once you have a qualified prospect, or sometimes sales is actually qualifying the prospect. So once, once you have a prospect, then sales moves it through to qualify the prospect, nurture the prospect, and convert them to a client. So brand to me is like the overarching feeling of your business. Marketing is how you get in front of more people, and then sales is how you convert them.
- [08:25]
A
When we look at many of the organizations both in our study and that we engage with around the globe, they may have some dedicated talent within the business around marketing and branding, maybe in sales, depending on the size of the business. And that can range from a marketing associate all the way to CMO and everything in between. And then we also see a mix of firms that are, you know, for all intents purposes, kind of trying to go in alone a little bit and they're deploying resources from an internal standpoint. And then for absolutely we see many organizations that are thinking, if I have a specialty need on a medical basis, I go to a specialist, I go to someone who can help me with something that I myself am not a specialist in. And that's often where both of you would come into play.
- [09:09]
C
I think that it's important to recognize that each business is individual and unique. And so there's really no one size fits all solution for what a business needs when they seek an external partner, whether it's partner for marketing or anything else in the business. And so I think we always want to speak to the leaders of the firm. FICOM often are working with the founders, the next generation leaders, the C suite, who are responsible for driving growth in the business. And so we ask immediately questions about their business strategy, where their business is today and where they're headed. Because what lies in those answers and the follow up questions that we ask is our ability to identify whether or not we're the right partner. And so that would be my sort of. If there was a blanket answer, it would be make sure that you're clear on how marketing strategically fits into your overall business strategy before you make decisions on who you would reach out to. I love about this industry how much information there is readily available. With great podcasts like this one, the trade publications, bloggers like Kitsis like, there's just so much out there, it can be overwhelming. People go to conferences and they hear about the newest technology. And I oftentimes see advisory firms like making decisions based on who they've met or what their friend is doing and not based on their business strategy. So that's sort of the first thing I would say is understand how marketing fits into your business strategy and then dial into what exactly you need and then go figure out which partner is the best. Where we sit at ficom is we really want to be an outsourced and embedded growth partner alongside our clients. I very intentionally built this business to serve the needs of advisory firms in growth mode that don't yet have an internal discipline built and don't have an unlimited budget. And so where we sit at ficom is we really fill three gaps for advisory firms. First is the strategy gap. So we bring a very deep level of management consulting experience to our work to align market strategy to business strategy, and then to assess the effectiveness and refine on an ongoing basis through consulting. So strategy is the first bucket that we fill. The second bucket that we fill is think of us as like an outsourced team to execute against the strategy. So from copywriting to graphic design to content strategy to digital to social media to public relations development, audio, like everything in between, we have all of those resources and capabilities internally to execute against the strategy that our strategists are leading. And then finally, the piece that's really differentiated for FICOM is that we believe that advisors are the number one lever for growth in an advisory firm. And that cuts across all areas of the business, including advisors. So we have a practice management component of our business that we call advisor activation, which is where we're activating the advisors in support of the strategy through ongoing coaching, resources and frameworks. So when we think about the value that we're able to drive, it's filling the bucket of strategy, ongoing execution and coaching for advisors. And we believe that that gives a lot of scale and it's only for a specific type of firm that's in growth mode, that's invested at the business level, whose key stakeholders are involved and who are sort of outpacing investment in growth versus their peers.
- [12:30]
A
Lauren, when you think about out and about and how you engage with or come alongside organizations, what shape and form has that taken on for you?
- [12:42]
B
It really depends on the stage that you're at in your business. Not every business, you know, like has a cookie cutter approach to it. I mean what we typically see is that firms that are, I'd say Under, you know, 300 million in AUM, they need like a phone and marketing specialist just to get support. Right? I mean you are trying to build out a team operations like you. Sometimes you just need that, trying to take good care of clients, that kind of support. We work with a lot of firms that are at that, you know, going from like the 500 million to over a billion, I'd say about 3 to 5 billion in assets under management. And typically in those situations, those firms, what might have like a, a COO that's dedicated to marketing and that's a really great person to have in that role because they're usually plugged into the C suite. And like Meg was talking about earlier, we have to constantly be aligned with the C suite and what's going on so that things change. We can change accordingly. So it's not just this kind of like we're doing marketing to be doing marketing as you get up. I'll just call it the AUM food chain, if you will. Let's call it, I'd say somewhere around 2 billion to 5 billion in assets under management. There's usually going to be a head of marketing, like a marketing director, maybe an assistant. We often work with those teams where they just need more arms and legs support. Like it's crazy. There's growth. People are pulled a million different ways. And then when you kind of get past about 500 billion, the team usually starts to build out and we'll usually partner with those teams. There's like a cmo. There's usually a team of. It could be anywhere from, I'd say three to six individuals that are spearheading marketing. And in those situations where we typically play best is there's a project, you go, we are completely overhead. We need somebody to come in and support. And it's all still, you know, it's all strategically aligned but it, the need varies depending on where you're at. But all of it requires strategy, it all requires big picture direction and it all requires, I'll call it like boots on ground. Support just at variant, you know, levels.
- [14:40]
A
Okay. So particularly, you know, as organizations are getting bigger and looking at different channels of growth, we know M and A is one that it's not even exclusive to the billion dollar plus. We see sub billion dollar firms now. What has been the impact or maybe the opportunity for an organization that is growing through M and A? Maybe how is that even different? Or perhaps a fun challenge for you, Lauren, as you engage with those businesses. And Meg would love to hear your perspective as well.
- [15:13]
B
Yeah, look at it. I'll say from, from two sides. So one is we talked about the brand earlier and the importance of keeping the brand intact. So if you're going through rapid M and A or really any kind of M and A. Right. Any team that's going to come on is going to have to feel, as Meg was alluding to earlier, the essence of the brand. And so part of marketing's role is to be able to support with the proper training and onboarding the collateral and making sure that those pieces are in place so that the brand doesn't kind of flip, I'll say like fall apart or becomes kind of diy. I need to slap the logo on. I need to do this and that here. So there's that side of it which is like, I'll call it the onboarding side of when a team might be coming on the other side of it, which is a unique challenge itself, is really setting up key players. It could be this, you know, the CEO. If it's a smaller firm, it could be a team of sales folks. Just depending on who the folks are, the decision makers making sure they have the right assets in place and the right external positioning to really be able to attract the right fit of firm just like you would be attracting an employee. But in this case it's a firm to join and to partner up with you. So it is a really unique situation. But I don't want to steal. Migs makes thoughts too.
- [16:20]
C
I mean, I think that inorganic growth, we all know it's been a huge driver of the growth of the RIA segment, especially when you look across other advisory channels. And in some ways I think that it's masked some underlying issues that we are now experiencing on the organic side. And those firms that are serial acquirers that we read about in the news every day, many of them are really challenge from an organic growth perspective. When you strip out market and you strip out acquisitions, organic growth isn't where it needs to be. And organic is what's going to drive future valuation. And so we like to think about understanding where organic and inorganic fit in the overall business strategy and then what your marketing strategy needs to do to reflect that. And we work on both the buy side and the sell side. And I think that having a strategic framework that's in place and documented before you start with M and A is really valuable because we want to know what's the plan for brand integration? Are you going to be fully integrated? Are there going to be DBAs in the business? What does that timeline look like? Do you expect them to be integrated on day one? Or is there a phased in approach? How are you communicating that to sellers that are in your pipeline? Or as a seller, how are you asking those questions? And so we help our clients to really put together those strategic frameworks that are documented and then the supporting communication pieces so that when an opportunity presents itself, it gets serious. You're moving into the LOI phase that you can get ahead of any potential surprises. One of the things that I love so much about this space is that, you know, a lot of the founders of RIA firms are kind of like renegades, right? Like they started businesses in the RIA space before that was cool. And they believe very much in their brand and in the business that they've built. And oftentimes it's their name. I mean, it's so connected to who they are. And so to think about integrating that passion and that enthusiasm into a new brand while not killing the spirit of the business owner whose business you just bought, it's really important. And we've found that like strong strategic frameworks, communications plans, and then marketing integration strategy can go a long way to both attract the right type of seller, but also to improve outcomes. When you think about the transition that happens, and there's a lot of key stakeholders in the communication plans that we put forward, starting with internal employees. Like those are your number one stakeholders to worry about when you're going through a transition. They're the people that are going to be on the phone with clients, answering the questions. They're like, why do I have to fill out this piece of paperwork again?
- [18:57]
A
Why did you do this?
- [18:58]
C
Why did you do this? Yeah, so like Comms Clan needs to cover not just clients, but also your internal stakeholders, your employees and your professional partners. And so it's sort of a big box body of work. But when you put a strategic framework in place and then you learn as you go, then it can become scalable and repeatable.
- [19:15]
A
And at the risk of stating the obvious, it would seem to me that if you are really purposeful, very, very candid about going through that strategic planning process. You are going to unearth where someone maybe is anchoring to their own, you know that the name that's been hanging on that door or anchoring to, you know, I'm the founder and now we've got, you know, next gen and they have vision and ideas about the business, all of that. If that's not fully vetted, both the buy and the sell side, but certainly on that sell side seems like that's going to hold you back relative to any transaction you're looking at doing.
- [19:52]
B
Yeah.
- [19:52]
C
And sort of be courageous and bold and honest in what you want and because the beauty of where the industry sits today is that there's every option you as a seller and as a buyer could paint the picture of exactly what you want. Like which transaction is going to work exactly well for you and only go after that because the optionality exists today so you don't have to make sacrifices that sellers 10 years ago did. So if brand is really important to you and it's a non negotiable, then go into the process with that non negotiable at the forefront. And conversely, if you're a buyer and you're not willing to have multiple DBAs in your business, say that up front. We've had one too many experiences where it's like, well, we know that the brand's really important so we're going to let them keep it. But we think after a year or two it's going to be okay and they'll want to come under our brand. That's not okay. That's a bait and switch. Just be honest about what works in your business, what the strategy is, what the brand integration model looks like and go forth. Because there's plenty of opportunities that will exist in the situations that work specifically for you.
- [20:58]
A
An advisor the other day say if one more person says to me, well we could just do it, be powered by.
- [21:03]
C
Yeah, what a marketing cluster that is.
- [21:05]
A
I'm like, holy. Well, let's not do that. Lauren, I'm curious. You know, this has been touched on already, but I want to come back to it because when we look at, I mean we capture 13, 14 different channels of growth in our Global Advisor study, we look year over year, you know, where there, where's their movement or changes in terms of, you know, where the largest amount of growth is coming from. Not surprisingly, client referrals is a primary driver and then you sort of move from there. But one channel of growth that we have seen over the last few years really in a quite steady fashion. Moving up the chain is advisors. And so this is reflective of the business's ability to develop, you know, essentially business development skills. And by the way, we do call out separately if you've got a business development officer, I know many that you work with are leveraging that role. But a true, you know, the advisor's ability to get confident about building their own network, finding their own network, making the ask. Of course, you know, whether that comes by a by way of a client referral or their own network, you know, and I think Meg, you touched on it. That's an individual brand, right? If you've got six or seven advisors or eight or 10 or 12 advisors, those are all individual micro brands potentially within the business. But they all have to operate and function under the larger brand of the business over time. At least. When we look at high performing firms that are really moving the organic growth needle, we see some attention to this. Lauren, when you think about pros and cons of that, because you know that personal why and why advisors, how they connect with prospective clients, existing clients is really important, important, but it's got a function underneath, a larger sense of clarity. How do you approach that?
- [22:49]
B
We see situations where a firm might have a, I'll call it umbrella target, let's just call it like a Gen X, just I'm going to be really general and then there can be subtargets underneath that and we see that those sub targets, if they're tight targets, it's where you've got the highest growth clip within the firm as far from a sales standpoint. So let's say there's an advisor, I'll just give an example here. Let's say they're going to go after like the aerospace industry, maybe they grew up in that industry or they have a certain passion around it or connections or something like that. They live in the city with it and they just nurture that. They go to those events. Maybe there's a piece of collateral that talks to them. It becomes like you said, part of their own brand. And when it becomes part of their own brand and it feels authentic, there's a natural, I'm going to call it almost an easier way to upsell because it's just coming from you doesn't feel sort of like this automated. You know, somebody told me to say X, Y and Z formula that I need to try to get a referral from or something of that sort. But it's very natural and it really comes down to that people side of taking care of people and being able to really speak the language with your clients that you're serving. So I can see that as advisors, specific advisors having a tight niche to be really beneficial. The other tool related to it that we see as a really helpful tool, this is more of a kind of an umbrella tool, is that we over the years have seen a lot of firms where they go, My client didn't know that I can do X, Y and Z. And we've been working with them for years. And a great tool that we've worked with firms to put in place is it's basically a kind of did you know we did all of these things tool. So you know, you're in that regular annual client meeting, you have something comes up, maybe they're a business owner who knows what it is and you can go and we actually do quite a few other things. Let me send you this PDF after, you know, our meeting. And it's literally like the top 40 things that we do. And so instead of going and outsourcing to someone else, it's a really natural upsell just to be able to put that in front of a prospect, or I'm going to call it a prospective upsell, a current client that they just might not know that you could do a lot more things.
- [24:54]
A
We're big fans of that gentle reminder as to all the things doing right, the value prop. Right that you're delivering. But we've also seen where, you know, it could be there's a particular service that that client may not need, but they know somebody who could, who needs it. Right. And so it's just an opportunity to remind them of like, of even, you know, if there's a service the client doesn't actively need themselves. But by the way, if, if they know someone. So I, I love that. But how so, but how do you and Meg, as you think about this, because we do want to foster, encourage, promote that individual brand. But first and foremost, I'm not to put words in your mouth, but it's got to represent that larger brand of the organization. What are some ways if someone's listening today thinking, yeah, I got a bunch of advisors, maybe we're almost unified, but not quite. Why? How do you tackle that?
- [25:44]
C
I think the concept of personal brands for advisors often makes founders really nervous because they think about like a while, I don't know, what are they, what are they saying?
- [25:55]
A
Which is ironic because most of them started out with their own.
- [25:59]
C
I know, right. But there's this thought of like Whoa, that feels a little bit out of control or a little bit wild. And oftentimes we think one of the biggest opportunities for advisory firms and what's most often missed is like taking your marketing the last mile. And the last mile is like two and through advisors. And so what we see work is thinking about not just what you're doing at the corporate level, but how that's activated through the individual advisors. And so that's sometimes as simple as putting together an internal communication plan to share the great content that's being created at the corporate level. Whether it's, you know, a blog, market commentary, events, virtual events that are being held. Thought leadership pieces is media coverage. If you're working with PR to create visibility and recognition through the media, putting together a process by which that's being disseminated to advisors and then helping them understand how they can and should leverage it. How are you sharing it on social media? How are you integrating it into your client communication pieces? If this is hyper relevant to a number of your clients, how are you sending it directly to them? And so there's sort of a communication plan and there's an education component to make sure that you're finishing that last mile. And so we've seen that work really well is just having a good degree of intentionality and proactivity behind it. And oftentimes what we've experienced and why we've built our training program the way that we've built it is like anything, there has to be consistency and repetition in the resources that you're providing to your advisors. So we do training sessions, we put together coaching cohorts, we share frameworks. There's the communication plan that I just referenced, but it's not one and done. It's part of your ongoing strategy. We invite advisors to come to a social media how are you showing up on social webinar? But then we're doing it again the next quarter, and then the next quarter and then the next quarter. And there's accountability that's baked into it as well. And so I think it's really about understanding what are the expectations of your corporate marketing efforts. What, what does that drive? And how are you measuring the success? But also what are the expectations of your advisors to activate that strategy in their own way? How you measuring success and what does that look like? And bridging the two. And it often comes down to that communication plan, the framework, the coaching and the ongoing accountability. And also to your point, like you can't just share office space, you need to share a vision it becomes really obvious if you've got an advisor, I'm just going to use a really like general example, but if you have an advisor that's out there talking to their clients about the importance of passive management and then that client goes onto the website and the firm is all about active management. Consumers today are quite savvy. They're going to recognize that disconnect and be like, wait, what I don't understand. And so we think that the brand, which is that feeling that you offer, needs to have, your brand needs to have specific beliefs, opinions, worldviews and that needs to be supported and aligned with your advisors. And so when your advisor's out in their market and they're speaking to their target audience, the types of clients that they work really well with, which may be different than their peers, that it in support of who the business is, what the business stands for, what the business believes in and so that there's alignment across the overall experience.
- [29:20]
A
Yeah, I mean it's, it's kind of. You were describing Lauren, of you may be an advisor that is focusing in, on a particular niche or type of client and that's great but absolutely we would agree there, there should be common ground from which everyone's working, from where they start applying sort of the nuance or, or unique elements to the, to the client they're pursuing. Okay, so I want to come out of the weeds a little bit. We haven't been too far down in the weeds, but a little bit out of the weeds. And you know, both of you spend a great deal of time thinking, you know, and observing, understanding what's happening across the industry. I'm kind of proud that we've made it, you know, 30 some odd minutes into this conversation and with the, the words AI or the initials AI have not been uttered, but we're going to talk about that. That. So when each of you look around the industry at large, you know, what are you seeing are some, you know, perhaps really exciting and interesting ways and opportunities that can help really galvanize the work that you're doing and the, and what, most importantly what advisors are seeking, what stands out to you is maybe what's pretty exciting right now. Lauren, does anything come to mind?
- [30:25]
B
This is probably going to sound like a no brainer, but just the ability to be able to research really quickly. These tools can leverage so much great research for an advisor that's creating content and that can get it so that you can still apply your own unique spin and voice on whatever's being produced. And then of Course, it's also really fun to be able to see advisors getting leads from ChatGPT or whatever it might be, because this is very real and those leads that are coming in are so much more qualified because someone's started to go down the rabbit hole to be able to find the firm they're looking for. For.
- [31:01]
A
So basically what you're saying is the days of it taking a month to produce a newsletter are gone.
- [31:06]
C
Right.
- [31:06]
A
Hopefully we get now or you can
- [31:08]
B
get an abundance of research quickly, which is really nice, you know, depending on the prompt.
- [31:14]
A
Yeah. And customize that content for the clients you're looking to target.
- [31:17]
B
That's right. And I mean there's a really delicate balance. Right. I think going and just prompting a blog and, and what have you and using that, I mean, frankly, it's an off the shelf content idea. I mean, we've seen it time and time again that that doesn't really move the needle. What moves the needle is you. Right. It's your voice, it's your unique spin, it's your brand as we've been talking about consistently. So you can use these tools to be able to help you get there faster, to be able to apply your own unique spin on it, but just the kind of cotton paste approach, it might get the blog out, but it's not going to move the needle long term.
- [31:51]
A
Meg, what are you observing?
- [31:53]
C
Equally excited about geo or generative engine optimization as Lauren is? Because we're seeing it happen. We're seeing the results come in and it's happened quickly. The shift from traditional search. So I Googled someone to now I asked chat GPT and those leads coming in and, and when done well, they're very qualified because rather than just searching Google for financial advisors in my area, people are now going on to chat GPT and having a conversation. This is, you know, you know who I am chat because we talk every day. And this what I'm thinking and this is what I'm concerned about and this is my specific status. What should I do? Oh, okay. I don't think I can do that on my own. So who can I work with to help me with this? And so then you're getting really targeted introductions for those firms who invested in SEO who are producing really meaningful content and who are discoverable by the AI LLM engines. Those leads are coming in and they're coming in fast. And so I find that like wildly exciting. And then I think also to Lauren's point, from a scalable content creation perspective, it's a very exciting time to think about how firms are leveraging technology to create greater scale and efficiency in their business, across the business. But we're talking here specifically around content creation. There is a big difference between using AI well and using AI as a crutch. And so what we find to be very important and we're, we've built a proprietary platform that our clients are able to leverage. We're building it and continuing to optimize and refine it where there's a project knowledge that's very resonant to the brand and the business. So you've got messaging frameworks, you've got strategy, you've got ideal client Personas, you've got content themes, tone, keywords, all built into the LLM. And then you can build individual advisor profiles so that the individual advisor can come in, add their own project knowledge base in support of the master project knowledge base, and create content that easily that's really resonant to the overall business. But what you can't do is just go into ChatGPT and say, Write me an article about required minimum distributions. It can do it, it will do it in less than a second. But you're going to be putting out content that just adds to the noise and adds to the slop that's out there. And so you want to think about how the opportunity is great and it's massive and I'm here for it and you want to make sure that you're using it effectively. One thing that I'll add, Catherine, you and I both spoke at the Napa Large Firm forum recently and there was an AI panel and someone asked, you know, raise your hand if you're using one AI, you know, platform or two or three. And it capped out at four. And I was surprised by that because I think I could count like 15 we use on a regular basis. So I asked the question, I was asking people, like, tell me a little bit more about that. What are you using? How are you using? Why are you using, using it? And then I asked, do you think your advisors are using it? And they all were kind of like, well, no, you know, they're not. I don't think they're using it. They're probably not using it or they're not allowed to use it. And I was like, they are, they are using it. So make sure that you've got a policy in place, you've got some governance around it, and that you're proactive. Because advisors today are active on things like chat, GPT and Perplexity. And Claude, they're using it. And so, so be forward thinking about how you can make sure that you've got the right governance, compliance controls, risk mitigation and growth opportunity in place. Because advisors today are absolutely using AI.
- [35:26]
A
Well and I think at the heart of what both of you are talking about too is something that, you know, we're starting to get asked about a little bit, which is, you know, fielding that inquiry from a prospect or maybe even a client that says, says, what do I need you for? I can go to ChatGPT and I can, you know, I can go, I can go to Gemini, I can get a financial plan. I can, you know what I'm, and I'm, I'm being a little bit facetious, but this is happening. And if, even if your clients and prospects are not voicing it, they might be thinking about it in the back of their mind. So I think at the heart of what both of you are describing is use these tools. They can be incredible opportunities to scale, to add knowledge and efficiency. But you have to give your own voice and expertise into them. You in terms of what you ultimately put out. Because I do think that that question is already cropping up and will likely crop up more frequently as we go forward anyway. It'll be something for advisors to maybe have to combat. Yeah, I think, Katherine, it goes back,
- [36:21]
B
I mean it goes back to, I think, you know, talking about origin stories. This is a human to human business. If you strip away that and you make it automated, I mean you're, you're taking away the very essence of, part of what makes it different. It's about being able to open up your heart, share conversations, being able to have that real time guidance, having someone you can turn to in all those highs and lows. And you want to make sure that you're putting that out through your brand. And if anything, I think it just highlights the importance of really getting clear on your brand if you're going to scale up. That is one of the biggest things that we start with when a firm goes, okay, you know, I knew I could get to this milestone this way, but to get to that next milestone, I can't do it the same way I got to that last one and that tightening of the brand and defining how you're showing up and knowing your voice is really, really key as you're growing. Just to bring it full circ circle to how we started.
- [37:10]
A
This might be a little bit Almost, you know, 1.0 question if you will, but one that is cropping up. I'd love to get both Your perspective is this idea of, you know, firms that are actively seeking reviews from their clients or maybe even prospects or maybe they're not actively seeking them, but they're showing up thoughts, feelings, reactions to that. Is it a tool, is it an opportunity? Or is it something that organizations, you know, need to keep an eye on and be guarded about?
- [37:38]
C
Meg, we see it as a total opportunity. I think that to piggyback on your comments, Lauren, this is a very human to human business. This is about that human interaction, the trust that you have that your clients have with you, the impact that you've had on their lives. And like so much of that is emotional and it's intangible. And so when you can put forth the voice of another client who can share, share the impact and the transformation and the peace of mind and the trust that they have with their financial advisor, there is no better way to communicate the value and impact of your firm and your services than through the voice of one of your clients. And so we've been very bullish on reviews since SEC updated their marketing rule. And there's a lot of technology tools that are available to help advisory firms do this at scale and in a very compliant manner. We, we ultimately are just looking at it as a need to have and to the earlier point around how powerful GEO has become. So that means leads coming in through an LLM. Those platforms give a lot of priority and preference to those firms who have validated consumer reviews. And so whether you have them on your website or you're listed as a top ranked advisor on Barron's or Forbes or any of those, that's quite powerful for your search efforts. And so we think it's something that you need to get ahead of. I often hear that it's like, wow, I don't really want to, you know, you don't know, know what the clients are going to say. And I'm not really sure that I want to survey my clients. All of our clients have been so proud and somewhat surprised with how beautifully the reviews come back. They're like, oh my gosh, you know, this makes me feel good. We've never had in the last three years had an experience where we've had to deal with a negative review. And that's not to say that that doesn't happen because I'm sure that it does. Just in my experience it hasn't happened happened. And so I think that it's a great way to capture the impact that you have to leverage the voice of the client and to, for your to allow your prospective clients to see themselves in your business because they see a commonality that they have with one of your existing clients.
- [39:53]
A
Well you know we see such a high client retention rate and then with our global investor study which is all about the end clients engagement level, satisfaction level, super high NPS in that study it is hard to imagine imagine a negative Google review because generally speaking advisors do such a fantastic job. But I suppose there probably are some
- [40:14]
B
out there just to go off of Meg's points too. I mean this is a form of social proof. So before SEC clear testimonials, you know it was and it still is awards and PR to be able to not just get a referral but if someone comes in cold there's a third party validation and that's key right. To be able to hear the voice of others. But I'm sure as Meg seen like there's all different kind of shapes and size and thoughts, thoughts and feels about reviews from compliance and what people feel comfortable doing or not doing. So there's the, I'll call it the more new just from the SEC role approach of asking for Google reviews. But there's also safer ways like putting together an anonymous case study or other approaches until you can use other means of social proof. But regardless it's important, it's important for others to hear what you can do and for them to really see that media social story.
- [41:06]
A
Lauren, in terms of that social proof, you know, so you mentioned you know, anonymous case studies, anything else you're leveraging or, or working with advisors in that particular area. Yeah.
- [41:17]
B
From a social proof standpoint sometimes we'll do mini case studies like a social media mini case study report. It works, it's a, a really nice play if you have a leave behind that is really tailored. If you've got that you're kind of at the bottom of the funnel, you're having that prospect call and you can send that, that longer case study to a prospect another way. And this isn't necessarily social proof but it's the human side is that when we look at our data across the firms that we work with the number two site or page on a website outside of the homepage is always advisor page, it's the team page and it's again such a human business. I feel like I'm on a repeat here. Right. But spend that time and humanize the pages and that could be be a fun photo, a fun fact. It could be it's just something outside of your credentials that's really important as well. It might be a Video. But being able to tell that story is really, really key. And it helps someone to connect before they even had a conversation with you even.
- [42:15]
A
It's probably been a handful of years now, but at one point in the study, we, we were asking some questions of clients and advisors. So in the Global Investor and Global Advisor, what do you look at when you go to the advisor's website? And advisors were like, oh, the client, they go to portal, they go to our newsletter. And clients were like, no, I go to your bio, even if I've worked with, even if I'm an existing client. So I think you're. Yeah, your, your point is a valid one. We should probably resurrect that question. That'd be fun to get some updates.
- [42:41]
C
I'd like to see that.
- [42:44]
A
Well, and I think something we haven't talked about today, we're absolutely seeing organizations whose public presence, their marketing, their branding, the way they're, they're putting themselves out there in terms of how they engage with clients is also attracting the kind of talent that they want for their business. And if someone's looking at applying or sending a resume or someone's made an offering to make a network introduction, you are going to hopefully go check out that firm. And I think thinking about what are we saying about how we just operate and even bringing things that are at a very cultural level to our business forward to support who we are. I always say, always be interviewing, like, even if you're not hiring. And so this idea that in theory, you could really have a talent always sort of knocking on your door. I think that's a pretty powerful opportunity with, with what we're talking about here today.
- [43:37]
B
Absolutely.
- [43:39]
A
So before we, we go into a bit of a, of a closing question, some people that are listening today, maybe they've actually already voiced this out loud. Okay, let's talk about the dollars. Let's talk about spend. And one of the things that we have watched in our Global Advisor study for years is the spend on, you know, so take human capital out. So specifically looking at that spend on marketing and branding as a percentage of revenue, and almost every year it continues to hang in that three and a half to four and a half percent range, it might go up in certain years if there's something really unique going on and it causes a lot of heartburn and consternation. I think for a lot of folks that say, well, you gotta, you gotta be spending some money on this too, like, but where the paralysis kicks in is, well, what am I gonna get? What am I gonna get for spending that money, money. And as we talked about the top of our time, that's where getting clear on your strategy is so important on that. But you know, when you think about how organizations should be thinking about the spend of dollars and the risk of not doing that, or what they maybe should be measuring or thinking about, what comes to mind on that. And I'll start with you Meg, on how you help organizations think about we got to write a check for something thing, what do we do about that?
- [44:53]
C
Right? I mean, to your point, it starts and stops with strategy. So what are you expecting marketing to drive in your business this year and get really, really clear on that? So is it, you know, what metrics are you measuring for success? Is it the number of qualified leads that come in the pipeline? Is it where those leads come from versus client client referrals versus COI referrals? Is it people who are coming in through digital properties? But your strategy should have clearly documented outcomes that you then, then apply your activity to. And so if you are unable to do that or it just doesn't seem like if, if you were to say to me, well, we've been growing pretty well, like I don't know that we need to change much, then I'd say, cool, don't change your marketing spend because if that's what you want, that's what you're going to get. But if you want to increase where you were, what your results were last year, this year, then get really clear on what that looks like and then apply the right budget. I would say at a sort of a generalization, we see firms that are investing into marketing and achieving outsized growth are spending more like 5 to 7% of their top line revenue on marketing. But not all marketing investments are equal and not all marketing investments produce the same return. So I think about it as a business owner, what do I expect my return on capital to be? So I bubble it up to the business level and if I'm going to go from spending a hundred thousand dollars on marketing, marketing last year to $200,000 on marketing this year, that's a hundred thousand dollar increase. I want to make sure that I have at minimum a 1 1/2 times return on that capital because otherwise I would invest it somewhere else. And so that means that you're going to have $150,000 drop to the bottom line to your profit from that investment in your marketing. If your marketing isn't moving the needle on profit, then you need to investigate and understand why. Because as a business owner Then you might want to spend your capital capital elsewhere. So we go much more from the strategic perspective than looking at like on a what's my ROI on social, what's my ROI on web? It's impossible for firms today to really understand that, especially with the concept of last click attribution. You don't actually know where your prospect has been and all of the touch points that they've engaged in. So I think that those are somewhat futile efforts to try to go ROI by channel. So I just look at are you getting the return on capital that you, you seek?
- [47:07]
A
Lauren, how do you approach that?
- [47:09]
B
I'd agree with Megan. The kind of opening statement there of it stops and starts with strategy. And if you're thinking about where do you spend dollars, if you're not clear as a leadership team about what north looks like, make sure that everyone's on the same train. We've got to know where we're going. And you know you're going to have your business metrics that you're going to be going after. And as long as there's clarity around that, you know the growth strategy, the target market, that there's alignment, marketing can plug into it and then create KPIs for the various stages of your business and where you're grow, that's going to adjust. I will also say that marketing can be really scary for firms that haven't really invested in it before. So there's also, you know, the crawl, walk, run approach and it's okay to start smaller and frankly, sometimes that is better. It gets leadership buy in. You know, you can also avoid trying to put the cart before the horse because there's a lot of shiny object in marketing. So getting that brand intact, getting the strategy clear, getting the key players aligned, and you can continue to add more and more on as you move forward and you'll feel that impact and you'll see it in real time. So it's okay to go from the shallow end to the deep end. And I think there is something really important to take into account, especially if you're not. If marketing's new to you.
- [48:20]
A
Yeah, I think that's a really powerful way to think about it. We capture 13, 14 different channels of growth. We are not suggesting that you need to be in 13, 14 channels. So sometimes I do see organizations that they're walking so carefully or so slowly that the ability to truly understand, you know, what's gonna move the needle, it's that fine line. And of course that's where folks like you can help organizations Figure out what is that line and where do they sort of jump and maybe go from the shallow end into the slightly deeper end as well. I think that's, that's really powerful. So I'd love to just close out our time with. I'm gonna call it a quick question. And I know it's probably not a super straight or quick, quick answer, but you know, if someone's listening today thinking, you know what, I actually need to consider a partner, someone me, really develop my strategy and think about what I want this business to look like going forward and then ultimately execute on it. What might be one question or one thing that they should put forth to evaluate who really is the right partner for them to achieve their objectives. And I'll start with you, Lauren, and then go to Meg.
- [49:28]
C
It comes down to the right fit, right?
- [49:30]
B
The cultural fit, the alignment. I mean, for us, we really value having strategy pulled all the way through, not just at the beginning. So I think it just, yeah, it
- [49:39]
C
comes down to the right fit.
- [49:40]
B
And I wouldn't be afraid to ask the big picture questions about the approach and what have you and then also the nuances of the day to day and how does that work and does that fit within the organization and do you have the bandwidth and capabilities to be able to do that?
- [49:52]
A
Great. Yeah. No, it's a great, really great point.
- [49:55]
C
Yeah. Along the same lines, I think if I could share one question to ask partners, it would be, please tell me, based on everything that you've heard, why you're the right partner and get specific, specific, because the first part of that question based on what you heard is really what you want to listen back to, that the partner has heard you, understands your business, understands your needs, and isn't just trying to sell you for the sake of getting a new client, but is able to be a long term partner. And I'm always happy to proactively say in conversations that we have, you know what, we're not the right fit for these reasons. And let me introduce you to another firm that is unfortunately not enough people have the confidence to do that. And so then you can find yourselves in the wrong fit. So that would be the question based on what you've heard about me, please tell me with specificity why you're the right partner.
- [50:46]
A
Well, that also implies hopefully or reveals and I know this is important for both of you that you've had the opportunity to engage with all, you know, as you talked about earlier, all stakeholders, that you're not just hearing one perspective of that one founder or the CEO that you are in a position to hear. What does growth, what does growth strategy mean for maybe not the entire organization, but for those that are asked every day to to make an impact on that. And so I think having that access, that access is a two way street. And so I love the implication of that in your question as well. Laura and Meg, I want to thank you both. We could talk for another hour easily, I'm sure, but we'll go ahead and close out our conversation today. I want to thank you both for taking the time, sharing your knowledge, sharing your expertise. For those of you listening, as I mentioned, you can absolutely check out the out and about podcast, Meg's Growth Leaders of Wealth Management podcast. You can find Lauren and Megan on LinkedIn and all the usual platforms out there. Thank you both for joining me today. I've really enjoyed our conversation.
- [51:47]
C
Thanks Katherine.
- [51:48]
B
Thank you.
- [51:48]
A
And for those of you listening, if you'd like to understand more about how Dimensional engages with financial professionals, you can check us out@dimensional.com and with that we will catch you next time.
- [51:59]
D
Thank you for joining us for Dimensional Fund Advisors, Mr. Managing youg Practice Podcast. For more information, please visit www.dimensional.com. dimensional Fund Advisors LP is an investment advisor registered with the securities and Exchange Commission. The views, information or opinions expressed during this podcast are solely those of the individuals involved and do not necessarily represent those of Dimensional or its affiliates. All expressed information and opinions are subject to change. This podcast is distributed for informational purposes and it is not to be construed as an offer, solicitation, recommendation or endorsement of any particular security, products or services. Please consult with qualified legal or tax professionals regarding your individual circumstances. Investing involves risks. Risks include loss of principle and fluctuating value. Despite Podcast is available for private, non commercial use only. You may not edit, modify or redistribute this podcast without the express written consent of Dimensional. Dimensional assumes no liability for any activities in connection with this podcast or for use in connection with any other website, computer or playing device.