Financial Advisors: Stop Burning Money on Leads!

Fair warning, you might not like what you’re about to read! Because the raw, unadulterated truth is that, for the overwhelming majority of financial advisors, buying leads is like burning money and here’s why…

You’re Not In Control

This is by far the biggest reason why financial advisors should not buy a leads list or any type of sales leads. 

It doesn’t matter how successful you think you are or how fast you’re growing. If you’re dependent on buying leads, you are NOT in control. 

It’s like running on a treadmill with flippers on, while someone else is throwing a bunch of random objects at you. You’re subject to harmful falls, bad bruises, and likely a short lifespan.

Now, before stop reading and calling bullsh!t, I want to point out that the key word here is DEPENDENT. Because if buying leads is a small part of your business and you’re consistently profiting from those bought leads, then that’s great! 

But there are some financial advisors who desperately seek out leads like the IRS seeks out your tax money. 

These advisors are sadly misguided, because with all the time (and money) they spend buying leads, they could build a business 10X the size of what they currently have. 

Instead, they’ll spend the rest of their days fulfilling their lead addiction while the smart financial advisors remain in control. 

Why? 

Because successful financial advisors know that the real money comes from CONTROL.

Finally, what happens if your preferred leads provider… 

  • Goes out of business?
  • Jacks up their prices, making your model unprofitable?
  • Decreases the quality of the leads?

What would you do? These are all things that could victimize you, should you give up control of the lead-gen part of your business.

Most Leads Companies Don’t Have Your Best Interests At Heart

On paper, the idea of using a lead-generation company sounds like a good one. After all, if they don’t send you good leads, they don’t get paid, right? 

Wrong. 

Some companies charge a fee simply to join their network and then make it their mission to generate as many “leads” as possible so they can send them to advisors in their network.

But, here’s the problem…if the leads don’t convert, that’s not their problem. It’s yours. And to an extent, that’s true. It IS up to you to convert your own leads. However, the only way for lead-generation companies to grow their businesses is to sell more and more leads, which inevitably leads to poor quality. 

Here’s how the process plays out: 

  • A lead-generation company is born. Maybe they find an untapped lead source or a lucrative interest group on Facebook or LinkedIn, so they run ads and generate a bunch of leads to sell them to financial advisors.
  • Eventually, that lead source gets tapped out. Yet, they still need to grow their company, so they try to explore other lead sources.
  • The new lead sources aren’t as good, which means the quality is lower. Or, they somehow manage to keep the quality just as high, but the cost to acquire those leads is also higher. This means financial advisors have to pay more and more (over time) to maintain the same quality.

As you can see, nearly all lead generation companies are fantastic… when they first get started. Then, things start to go downhill faster than a man leaving after hearing the pregnancy test results.

Not All Leads Are Created Equal

If you’ve ever bought leads, you know this is true. It’s related to the problem I just explained – lead companies constantly have to source new leads to feed the growing demand from financial advisors. In order to do that, they must seek out new audiences and new placements. 

Besides, people who hire a financial advisor often do so by evaluating the advisor’s website and social media accounts first. Or they seek a referral from friends and family members.

Very few high-net-worth individuals find their financial advisor as a result of being in a list of sales leads. And if you do somehow manage to find a list of high-net-worth individual leads, you’re going to pay for it, which can get expensive fast. 

For example, you could pay upwards of $200 PER LEAD for someone who SAYS he/she has investable assets of $1 million or more. Because a lot of these lead-gen sites are just contact forms where people can say whatever they want. It’s self-reported. Just because someone says he has a million dollars of investable assets doesn’t mean it’s true. And you’ll burn through a few Benjamins to find it out the hard way. 

Anyway, let’s assume you’re spending $200 per lead and they’re all 100% legit. Assuming you go through twenty leads to get one client, that means you’re paying $4,000 to get one client. If that’s profitable for you, then more power to you. But if you really want to succeed in business, you have to master capital allocation and, quite frankly, this isn’t the best use of your capital.

Converting Purchased Leads Is Difficult

ESPECIALLY if the leads aren’t exclusive. If they are exclusive, expect to pay out the nose for them. 

Most financial advisor leads are non-exclusive, which means by the time you make contact with your leads, you may find that two other financial advisors have already beaten you to the punch. And unless you work with a specific niche and you’re only buying leads in that niche, you won’t have any way to differentiate yourself from the others. 

Also, a lot of lead companies will sell you the prospect’s phone number. This is notoriously unreliable because people don’t really answer the phone anymore. 

In fact, studies have found that nearly 90% of consumers don’t answer the phone for the following reasons: 

  • They’re busy. 
  • Phone calls take too long. 
  • They don’t like people hearing their phone calls. 
  • They have anxiety about talking on the phone. 
  • Phone calls are intrusive.
  • They don’t feel like talking on the phone.
  • The lead doesn’t have time to get caught up in a conversation.
  • They prefer to communicate in other ways. 

Plus, you follow my advice about niching down, then buying a list of leads is essentially business suicide. You will be forced to take what you can get because the chances of your leads fitting your exact niche are slim-to-none. Which scatters your focus… and your profits.

The Better Alternative: Do It Yourself… 

There’s literally no excuse for not being able to generate your own leads anymore. 

For example, if you type “financial advisor near me” into a search engine, the results are domination by crappy lead-generation companies whose sole purpose in life is to extract data from consumers. You, on the other hand, could rank for this term by providing valuable content for people. Once visitors get to your site, a certain percentage of them will reach out to you (not some third-party company) for more information. 

Your website should be generating leads for you 24/7. It never gets sick, it never gets tired, and it does whatever you tell it to do. When people visit your website for information, they’re thinking of you as a source of advice (which is what you want). If they keep coming back and you finally tell them about the services you offer, what do you think are the chances of them listening to you?

A LOT better than buying leads. 

It’s better to generate your own leads because you can put your own contact information out into the world so people can contact you directly. 

Plus, when you build your own marketing machine, you are building a system that will work for you throughout your career. Once you buy a lead from a lead generation company, the transaction is over. You have no real “equity” in the deal.

Bottom Line

It’s important that you understand that you can do everything that lead-generation companies do, WITHOUT taking time away from your core business and daily activities. In essence, you can cut out the middleman and grow your own marketing machine that works solely for you.

If you’re interested in learning more about how you can accomplish this or would like to simply just get a complimentary 2nd opinion on your current marketing and lead generation strategies get in touch with us here.

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