Seeking new clients

Many financial advisers think that the best way to rebuild their businesses after the economic downturn is to find new clients.

They also consider layoffs and cost-cutting to be last resorts, according to a survey conducted by SEI Advisor Network, a business unit of global asset management and outsourcing provider SEI Investments Co. of Oaks, Pa.

Of the 205 independent advisers who responded to the online poll taken May 15, 58.7% ranked client acquisition as the top strategy for restoring revenue.

At the same time, 14.9% of respondents cited expense reduction as their primary strategy for rebuilding revenue, while just 1% said they were reducing staff. Meanwhile, 12.9% named securing more assets from existing clients, and 12.4% said adding products or services.

The poll also asked advisers about techniques for attracting new clients.

When asked which strategies they had never used before or used only minimally, 43.9% of respondents said that they were specifically asking clients for referrals.

In addition, 16.6% said that they formalized referral arrangements with other professionals such as accountants and attorneys, 13.9% said they used niche marketing, 10.7% said they used direct mail, 9.6% said seminars, and 5.3% cited advertising.

A full 37.2% of advisers attributed their success in adding new business to clients’ dissatisfaction with the service they got from their previous advisers. And 18.6% said that the primary reason cited by prospects was that they no longer wanted to manage their own investments.

Also, 18.6% said that the clients were looking for additional services such as tax or estate planning, and 16.1% said the clients were unhappy with the performance of their investments and left their old adviser. Still, 9.5% said that new clients were unhappy with their advisers but weren’t ready to leave completely.

Related Topics: IN Research, SEI Investments Co.