Survey Report by Feedsy

 

Foreword

“How do I grow and retain my clientele?” – a question that financial advisers and accountants ask themselves on a regular basis.

We recently conducted a market research survey asking our clients what challenges they face in marketing their services. Despite differences in the area of expertise, market knowledge, and communication style, all participants agreed that a lack of resources and insufficient marketing expertise can cripple their business growth.

In fact, the majority of our survey respondents cited their biggest challenge to be the lack of an effective marketing strategy, especially when it comes to spreading word-of-mouth—considered by many to be the most valuable source of new business.

Adhering to stricter compliance regulations and government legislation often imposes limitations on financial advisers when it comes to marketing, and managing a strategy effectively is a full-time job in and of itself.

In this report, we will dive into the key marketing challenges faced by financial advisers and accountants.

 

Survey Respondents – an Overview

55 businesses responded to our survey. Of these businesses, the majority worked in financial services, including 67% as financial advisers and 15% as accountants. Insurance, business advice, mortgage and loan brokers, and various other business sectors made up the remaining respondents.

Regarding business size, 65% of our survey respondents had a business with five or fewer employees. 28% reported a team size of 6-20 employees and 7% had a staff-size of between 21 and 50 individuals.

 

Combining this information, almost half of our survey respondents (43.6%) consisted of financial advisers with a team size of one to five people. The second biggest group was larger financial adviser firms with a team of 6-20 people, and the third biggest group consisted of small accountant firms with up to five employees, which accounted for 9.1% of the respondents.

 

Biggest Marketing Challenges Overall

Common across all industries that our survey participants operate in, the four biggest challenges were identified as generating new leads (20%), generating more referrals (16%) and extending services to existing clients (upselling) and creating brand awareness both on 12.7%.

Whilst not a specific marketing challenge, 10% of respondents cited government legislation and dealing with compliance as a major stumbling block. 9.1% believed that converting leads to a sale was a major marketing issue and another 9.1% claimed client retention as their biggest marketing challenge of 2018.

Having or meeting a strategy also came under the “other category”, with 3.6% of respondents identifying this challenge, another 3.6% identified a need for better quality clients, and a further 3.6% were challenged with staffing issues to handle growth or succession.

It’s logical that different business sizes have different priorities when it comes to marketing challenges.

For small businesses, generating new leads and getting referrals are clearly the most significant challenges, with 22.9% of small businesses reporting these as their biggest issue. Brand awareness and the ability to convert sales are also identified marketing specific challenges, at 14.3% and 11.4% respectively.

Larger businesses of up to 20 people have different challenges. Successful upsells to existing clients were stated as a challenge by 28.6% of these respondents and customer retention and complying with government regulations were also in the top three challenges.

For businesses with over 20 employees, which accounted for only a small percentage of our survey respondents, customer retention, upsell opportunities, and sales conversion were identified as the major challenges.

These trends show that small businesses are more likely to rely on organic referrals (i.e. not a dedicated referral marketing plan or method) and new leads for brand awareness, but lack resources or expertise to generate new leads or create broader brand awareness. Conversely, bigger businesses can achieve more from leveraging their existing substantial client base.

 

Putting all this information together, we identified five major marketing challenges that our customers are dealing with:

Challenge 1. Growth by Generating Leads (major challenge for small businesses)

14.5% of all survey respondents were small businesses of 1-5 people, who currently generate most of their new business through client or partner referrals, but would like more opportunities to attract and capture new customers outside of existing peer-to-peer and business networks.

The obstacles they face include:

• A lack of time, budget, and know-how
• A general lack of public awareness of how financial advisers can help people
• Lack of awareness about their brand
• Dealing with continuing regulatory changes and government “red tape”
• Potential negative sentiment of their dealer group due to the recent media coverage of the Australian Bank Royal Commission, which could hamper generating new leads.

 

Challenge 2. Growth by Referrals (major challenge for small businesses)

14.5% of all survey participants are small businesses that reported referral generation to be their most valuable source of new business (often their only source of new clients), and also the biggest marketing challenge. Part of the reason for this may be that small businesses tend to deal with a limited number of customers and therefore the opportunities for generating referrals are fewer.

Despite this lack of referrals, most of our clients admitted to not investing in referral marketing actively, or to not having a proper referral system in place. This counts for both customer referrals and leads from other businesses such as an accountant recommending a financial adviser, and vice versa. Among the contributing factors are:

• A lack of time and know-how
• A general lack of awareness of how financial advisers can help people
• Compliance regulations (i.e. fear of doing something wrong under increasingly complex regulations, and inadvertently breaking the law, which may result in a lost license and potential business collapse)

Extensive research has shown that referrals are a source of opportunity—as well as frustration—for financial advisers. Our clients know that providing a positive experience for existing clients is more likely to result in referrals.

Based on our findings, while the likeliness of generating referrals correlates with the level of satisfaction and loyalty of each client, small businesses must first ask clients to refer other customers, and secondly make it easier and more attractive for existing clients to refer new business leads.

 

Challenge 3. Upselling and extending Offer to Existing Customers (major challenge for medium-sized businesses)

The major challenge for medium-sized financial advice businesses identified in our survey is converting existing clients to new offers (7.3% of respondents). While they may currently have a healthy database of clients, they are prevented from upselling their services due to:

• A general lack of awareness of extra services offered
• A lack of time and know-how (approach)
• Compliance regulations
• Staffing to handle the growth or diversity

 

Challenge 4. Increasing Brand Awareness (major challenge for small businesses)

Our small business respondents currently generate most of their business through client and partner referrals and have a general lack of man hours and knowledge to grow exposure and goodwill of their brand in other ways. Major barriers cited include:

• Their own lack of time and know-how to create, differentiate and promote their brand
• General lack of public awareness of how financial advisers can help people
• Difficulties or fears around complying with government regulations
• An overcrowded market (particularly an issue for accountants)
• For some financial advisers – being unable to rely on the brand awareness of their dealer group due to negative media coverage, and instead having to build their own brand.

 

Challenge 5. Converting Leads to Sales (major challenge for small businesses)

7.3% of respondents to our survey were small businesses who had lots of requests for quotes and proposals but felt unable to convert these leads into sales. Difficulties and obstacles included:

• Not enough resources (time/staff/money)
• Inefficient or non-existent systems
• Fears over compliance red tape also made this a burden for both financial advisers and their prospects.

 

Summary – How Can Businesses Overcome These Challenges?

Across all five of these common challenges, there are recurring themes in terms of the difficulties and obstacles encountered.

Compliance – a major challenge for financial advisers

Many respondents cited issues dealing with compliance regulations making it difficult to succeed with marketing goals such as converting leads, upselling, and generating leads and referrals.

Compliance was also noted to be an issue as it increases the amount of necessary paperwork, and at the same time offers nothing of value to the client. In fact, several respondents went as far as saying that government regulations and “ridiculous levels of process” prevented them from looking after their clients properly. There was also a suggestion to “replace politicians with ones who have actually run a business for a living”.

Insufficient time, budget, and resources – a common problem for all sectors

A lack of time and resources were also commonly cited as an issue, particularly with smaller businesses who naturally lack the staff and resources to process marketing processes efficiently.

Lack of know-how is an equally big sticking point – many businesses simply don’t know where to get started when it comes to generating leads and referrals, increasing brand awareness, and upselling to existing customers.

Many of these challenges can be overcome by outsourcing these tasks to marketing specialists, who are compliant with current legislation in the financial services industry as well as having the knowledge and experience to attract more clients and grow the business.

 

This report was conducted and the results were compiled by Feedsy – who generate goodwill and referrals with automated regular communications for small to medium-size businesses in the financial services sector.