We have all of these ideas about strategy and marketing your business. There’s so many ways to grow your brand as a financial advisor that it could actually be overwhelming. This post deals with the all-important question “How Much Should Financial Advisors Spend on Marketing?”
On top of thinking about marketing, mapping out a budget for nearly every expense isn’t exactly a walk in the park. By the time you get your budget right, you may be asking yourself, “Where is there room to spend on marketing?”
This question alone could lead you down another investigation as you look for a sweet spot to spend. Luckily we’re here to give some budgeting pointers (even financial advisors take money spending tips too). We’re looking at how much you should spend on marketing so you won’t feel like you’re taking a stab in the dark with your budget.
The Short Answer
Let’s get right to the point. You might have heard a popular guideline statistic from the U.S. Small Business Administration that recommends how much you should spend on marketing. They suggest spending 7 to 8 percent of your gross revenue for marketing and advertising.
The guideline is directed towards small businesses on the newer side that have been operating from 1 to 5 years. But having a rule of thumb isn’t anything to swear by. Let’s unpack this further by breaking down exactly what you should be spending your 7 to 8 percent on.
Marketing on Different Channels
Once you have a general idea of how much you want to spend on marketing, start to break it up into different marketing channels. It’s good to diversify your marketing into different channels to gain maximum exposure for your business. While there’s more categories to choose from, we’re looking at the following four channels.
Advertisements & landing pages – 10%
I recommend spending 10% of your marketing budget on targeted advertisements and website landing pages. Advertisements fall under an umbrella of marketing tactics. You could spend money on print, social, outdoor, and search engine ads. The key is, to find a niche and run your ads with it in order to get a targeted audience. You don’t want to waste time or money showing ads to people who don’t care about you.
For example, you could reach out to a specific target market with the use of a landing page designed specifically for them. These people are already interested in your service. Target your audience with their challenges, pain points, and issues only they are having.
You shouldn’t sleep on search engine ads either. Paid ads on Google can have benefits for your clients, if done well. Here are a few benefits…
- Directs people on where to contact your business
- Increases more visitors to your services page
- Allows full control over how much you spend based on performance
- Increases leads
- High ROI
- Almost instant results
Website Marketing – 35%
A financial advisor looking for successful growth should definitely favor spending on their website. In digital marketing today, top financial advisors are using their website to design inbound marketing leads. Most financial advisors however, neglect their site by missing key information that potential clients seek.
Spend 35% of your marketing budget on your website. If you need to spend to redesign your site it will be well worth the investment and it’s a one-time expense. Have a clear photo of you and build an “About Us” or “About the Team”. People could trust what they can see. That’s why showing who you are along with a clear mission statement lets you build a connection with site visitors. Have a section dedicated to your services and pricing so the right people looking for your help reach out to you.
After that, maintain your website by building web traffic. You can do this by producing content that brings value to visitors. Google favors websites that make quality content that people are seeking.
Additionally, you can make content in the form of:
- Tutorial Videos
- Email Newsletters
- PDF Guides
Social Media – 40%
Before you get started on social media, you must understand who you want to reach. Who is your target audience and how can you help them? Think about your best clients. What can you post that will attract people just like your best clients. Social media is an absolute powerhouse for marketing right now.
You’ll have to decide which platforms you want to capitalize on (you don’t need all of them). But safe to say, any platform could be useful with the right strategy, just look at how active people are on social media.
- Facebook – 2.2B+ active users
- Instagram – 1B+ active users
- Youtube – 1.9B+ active users
- LinkedIn – 600M+active users
- Twitter – 300M+ active users
Spending 40% of your marketing budget on social media is perfect for covering paid posts or even hiring a social media manager. A social media manager can organize future custom posts in a schedule, research hashtags for growth, use emojis, and could even run social media ads for you. A paid ad could target local people in your area or span across the whole country. With just a few hundred dollars you could reach tens of thousands of people with your posts. It creates new leads left and right for clients who may need financial advertising.
Events – 15%
If you’re key to success with financial advising is to build trust with people, investing in events may be right for you. This gives you the opportunity to meet with people face to face (or virtually) and network. Building connections could land you a new client on the spot! If you need some ideas for a fantastic event, we have two ideas you could consider.
Pair up with a local winery in the area for some cross collaboration. You can express a wine-tasting event as gratitude for your existing clients or showcase it as a promotion for new ones. Treat it like a casual event where people could loosen up and socialize. It’s great for people looking to break up the work week with a social event. Learn more here 5 Client Appreciation Events Create Engagement.
Team up with specialists in your area that can teach a valuable topic such as time management or personality quizzes that help us learn more about ourselves. Attract new clients with workshops at a low-cost by thinking through your topic and goals for the event. Learn more here: 39 Financial Advisor Marketing Ideas That Rock.
Final thoughts on how much financial advisors should spend on advertising:
If you are looking to grow your firm, clients are not going to just show up at your virtual front door. You have to do something to attract them. Deciding upon your Value Proposition and how much you can spend to attract them is one of the first steps to putting a plan in place. Go by the general rule of 7 – 8% and you’re almost ready to plan!