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Welcome to MythBusters Registered Investment Advisor Edition. Here we tackle the tall tales of
industry folklore MythBusters, registered Investment Advisor edition. Remember to share and subscribe for more financial services marketing insights, and drop your questions in the comments below.
Hi, I'm Seth Greene, and today we'll be busting some of the biggest myths in financial services marketing, and we're going to bust some in this video.
We're going to bust some in another video. There's going to be a whole video series debunking the most common myths in financial services marketing, and talking about how to solve your frustration.
If you are a financial advisor, registered investment advisory firm, you have come to the right place.
Let's talk about myth number one, the biggest myth in financial services marketing.
When I speak, and you'll hear more about who I am and why you're listening to me later, but when I speak at financial services industry conferences, when I'm on podcasts, when I do webinars, one of the most common questions I ask the financial advisors and RIAs in the room is:
What's the most common way you get clients? What are your common marketing techniques? We hear seminars, we hear direct mail, we hear Facebook ads, but the most common one is referrals. Word of mouth.
Most advisors that I interview on the RA podcast, when I ask them, where do you get most of your business from? The answer, nine times out of 10 is word of mouth or referrals. In fact, plenty of advisors and RIAs, and you might be one of 'em, think, Hey, I don't do that much external marketing. I run a referral based practice, and you might be thinking that to yourself right now.
Why is that a myth? Let's take you through a really quick exercise.
Grab a piece of paper, do some easy back of the napkin math with me.
First question, how many clients or households are you actively serving right now?
I'm going to just make this easy for easy math a hundred clients.
Next question, how many referrals did you get last month? Most recent month you've got a calendar for, depending on when you're watching this, think back, count it up. How many referrals did you get? Let's say that you got five referrals last month, more than one week, you're feeling pretty good.
Now, I want you to do some math, and I want you to divide the number of referrals by the number of clients, which gets you your true referral rate.
In this case, five to by a hundred is 5%, got a 5% referral rate last month.
Here's the scary part. Flip that number upside down.
Take a hundred percent minus your 5% referral rate, and that equals the number of the percentage of clients that did not refer to you last month.03:00):
In this case, if you got five referrals from a hundred clients, 5% referral rate, 95% of your clients didn't refer last month.
Do you really run a referral based practice if 95% of your clients didn't refer last month?
In the next couple of videos, we'll talk about debunking some of the other myths in financial services marketing. We'll talk about why your marketing isn't working the way you're hoping it to if you're doing external marketing.
We're going to talk about why your clients aren't referring at a much higher rate and how to fix that. We've got some cool surprises along the way for you.
We're even going to teach you the two formulas for success in financial services marketing. Stay tuned. We'll see you on the next video.
Thanks for watching Mythbuster's Registered Investment Advisor edition. Seth Greene is the nation's foremost authority on direct response marketing for registered investment advisors. He's a nine time bestselling author, A three-time. Dan Kennedy, magnetic Marketing marketer of the year nominee. Seth Co-hosts the Shark Preneur podcast with Shark Tank's, Kevin Harrington. He is the CEO of a Inc 5,000 financial services marketing company and has been written about in registered Rep Insurance News Net, Forbes, Inc. And many more. Thanks for watching Mythbuster's Registered Investment Advisor edition. Remember to share and subscribe for more financial services marketing insights, and drop your questions in the comments.