In the competitive world of financial advising, finding new clients – especially ones with a high AUM – is an ongoing challenge. If your advising business is seeking new ways to grow, you may have considered buying leads from lead aggregators. But is working with a lead generation service the right move for your company?
Lead buying can deliver quick results, but there are important factors to examine before diving in. We’ll review the pros and cons of the practice so that you can feel confident in whichever decision you make.
When you purchase a lead, you’re getting a potential client’s contact information – often including assets under management (AUM), household income, and other relevant data.
A separate company from yours handles the front-end work: identifying people in the market for an advisor, filtering contacts based on your criteria, and delivering those matches to you to close. There can be some differences in the data hand-off, but this is the general process.
There are plenty of lead providers to choose from and they can be easily found with a search for “financial advisor leads” or a similar variation. However, they range on factors like the level of service they provide, how customizable their leads are, and how much they charge.
For many advisory firms, the primary benefit of this approach is being able to rapidly fill the pipeline while avoiding the time and monetary investment required for doing that in-house.
Especially for newer advisors or for firms entering a different market, purchasing leads can be a way of getting started immediately. If you know your team has the skills to close and they have the capacity to take on more volume, having potential clients delivered to your inbox allows your people to do what they do best and swiftly scale up the business.
Financial advising can be a cyclical business, with periods of lulls throughout the year and peaks around the first quarter of the calendar year. While you have some ability to predict when these changes will occur, supplementing the down times with external leads can help even out volume across quarters.
Finding the right potential clients takes time. If you choose to do that in-house, that means spending time building clientele through organic means like making cold calls from LinkedIn profiles, attending networking events, vetting the potential clients who approach you, and generally doing everything except market research and advising your existing clients.
Building a personal brand is a worthwhile pursuit, but there’s no denying that it’s a time-consuming process. If you’re proficient in closing leads and want to get back to the financial advising part of your job, buying contacts is a way to lean into your strengths while outsourcing the parts that take away from those areas.
While buying an exclusive lead for upwards of $1,000 might sound steep, think about how much you would spend to acquire that contact on your own.
If you’re using paid marketing, the investment can add up. Hiring experts, spending time on strategic and tactical plans, getting your tech stack right, managing the ongoing campaigns – it might be more cost-effective to purchase the leads outright rather than trying to replicate what the lead aggregators do.
On the other hand, lead buying is not right for all financial advisors at all times. Consider the following before making the investment.
Any time you outsource work, you give up some level of control and cannot directly monitor where an aggregator is getting its prospects and what filters are in place to narrow down traffic. That said, sending quality leads is in the aggregator’s best interests for continuing the partnership, and you always have the option to end the working relationship.
While you may have communicated your ideal customer acquisition cost or payback period, it’s unlikely that a lead provider service will guarantee revenue results. It takes time to close leads, and things like a firm’s ability to close and broader market trends can influence how a prospect behaves. When you buy leads at a set rate, you’re not only banking on the aggregator’s ability to send quality traffic, but also that other parts of the sales process and market will even out in your favor.
If your in-house team is not dedicating some time to scaling the business at the same time as you’re purchasing contacts, you risk becoming dependent on an external company for your prospects. If that company’s quality or volume dries up, that will directly impact your firm.
Lead buying works best for practices that already have strong close rates and/or a strong lead nurturing system in place. If you’re not equipped to follow up consistently or don’t have a process for turning interest into action, spending extra money on leads is likely not an effective solution.
If you decide that this strategy is not for you at this time, there are alternative strategies that keep the full control of the lead gen process in your hands. As a bonus, developing your organic lead generation strategy can improve your success with lead vendors in the future, since having a stronger brand can make you more competitive.
These strategies take some work at the beginning and some hours along the way, but they are built for long-term returns with minimal ongoing effort.
Perhaps the most obvious avenue for finding additional qualified potential clients: asking your existing qualified clientele. You may choose to offer a referral discount or add a line to your email signature about welcoming new clients.
Setting up an email drip sequence can help keep interested potential clients engaged. This can be as simple as a few automated follow-up emails or as complex as a weekly blog series sent out to every contact on your list.
Of the three examples of passive lead generation strategies, this one is the most intensive but could have the largest reach. Creating content that people want to engage with brings visibility to your brand and helps your website appear in search results without paying for ads. This content can be repurposed into an ad hoc email campaign or reposted on socials.
For most of these strategies, you’re constrained by the number of hours you have in a day. Because of this, these should be scaled up or down based on bandwidth and business impact.
Most financial advisors are already doing some level of networking. As an organic tactic, you can lean into this even more heavily by attending conferences, joining business associations, or showing up to local networking events.
This can be similar to the content marketing and SEO mentioned in the previous section, but this is more of an ongoing tactic. You can record webinars or host educational events that can later be shared on social media or spun into a blog post. In your community, you might lead a quarterly workshop on financial planning and offer a discount for attendees on your financial advising services.
In an increasingly digital world, people often find brands from their social media profiles. Improve that likelihood for your brand by consistently posting relevant and engaging content around topics in your niche and by interacting with other similar content.
If you feel like your financial advising business is at the point where buying leads from an aggregator makes sense, then it’s time to do some homework in assessing which aggregator is right for you.
Start by outlining your ideal client:
.jpg)
You might be able to get a sense for how reputable an aggregator is based on their website and social media accounts, but you can also go directly to the source and ask them a few questions in an intro call or demo.
Aggregators will likely be protective of the exact sources for all of their lead traffic, but they should be able to give you some details about their primary channels if that isn’t evident already. Most aggregators will have a presence on major search engines that funnels people already seeking financial advisors or financial advice into their website. They may also use organic methods to attract traffic. If they dodge the question or can’t explain how they qualify people, this should give you pause.
A good lead aggregator should have protections against fraudulent leads. This can include automatic verifications for phone number and email address, or they may go as far as calling people on your behalf to verify that the details they provided are correct.
They should also have policies around what happens if you get sent a fraudulent lead despite their checks. Some vendors will issue refunds, while others may have certain thresholds for refunds or choose not to refund altogether. Aggregators with thresholds or who don’t refund aren’t necessarily less reputable, but it’s something to look at when reviewing total cost.
Lead providers should be able to provide some general benchmarks around the kinds of results you can expect to see from their traffic. Some key metrics can include lead volume expectations and a range for typical schedule rates. If you ask for close rate data and average AUM, know that these may be more nuanced by partner and the aggregator might not have a clear benchmark for your particular lead criteria.
Tech integrations require collaboration on both sides. As you’re speaking with lead aggregators, make sure you understand how they pass the lead data to your CRM platform and what they require from you to inform their optimizations.
Most aggregators will want conversion data to be sent back on a timely and consistent basis so that they can identify areas of their program that are performing well or that need improvement.
Have your technical lead join on a demo call to see if your tech stacks are compatible.
Buying contacts has the appeal of quick results. If you’re working with a reputable service and the leads are at a price point that makes sense for your practice, tapping into their volume offers a viable route to scaling much faster than you’d be able to on your own.
But, this is only possible if your firm also has the foundations in sales and lead nurturing to turn those prospects into clients at the rate that would justify the additional expense. If the basics are not yet in place, focusing on those areas first will improve your odds of making lead-buying work in your favor in the future.
Lead buying is just one part in a diversified client acquisition strategy. If it isn’t right for your business just yet, focus on building up your brand’s equity through organic means and solidifying your nurture sequences. This will go a long way if and when you decide to start working with an advisor lead aggregator.
If you are ready to add lead buying into your mix, start small with a partner or two. While lead-buying is faster than building your own brand and attracting people that way, it will still take time for potential clients to schedule and close. View the process as a multi-month test rather than a switch that brings in AUM overnight.
If you’re interested in starting or expanding your lead-buying program, Advisor.com can help with that. Check out our process and schedule a free demo to see how our lead gen business can complement yours.
