Even though 45% of investors choose financial advisers through digital marketing, only 29% of financial advisory firms prioritise it as a client acquisition strategy, according to Ficomm.
The 2024 Financial Advisor Growth Marketing Study found that while consumers prefer digital marketing to find advisers, firms still rely heavily on referrals to attract new clients, highlighting a disconnect between how firms market themselves and how consumers choose their advisers.
In fact, 47% of firms rely primarily on referrals, despite only 29% of consumers considering a referral necessary when hiring an adviser.
This trend varies by age as 60% of clients over the age of 60 reported they would only hire an adviser through a referral. However, this was the last age group where the majority required one.
In comparison, for those under the age of 44 who have hired a financial adviser, only 17% required a referral whereas 57% chose based on digital marketing.
The report noted that firms must adapt to changing trends and embrace digital marketing, particularly those advising the “nearing retirement” audience.
In the next five years, these firms will engage with a new age group where only 29% require a referral to hire an adviser, and 45% will have chosen their adviser through digital marketing, underscoring the need for a move away from referrals towards digital marketing.
Meg Carpenter, CEO and co-founder of Ficomm, said: “Referrals will always be an important channel for growth, but as the consumer’s buying practices change, financial advisory firms must adapt by integrating strategies that meet consumers where they are.”
The report also revealed that while investors prefer digital marketing strategies, no single tactic stood out. Instead, a combined, multi-channel digital approach proved most effective.
It found that 64% of successful marketing tactics were digital, and at least two digital interactions were needed before consumers took action, with the ideal number being five or more.