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Financial advisors are increasingly turning to social media platforms to expand their client base. But in today’s rapidly evolving digital landscape, the traditional marketing funnel model – comprising awareness, engagement, and conversion stages – often falls short when applied to these platforms. This article delves into the reasons behind this discrepancy and offers insights into more effective strategies for financial advisors seeking to harness the power of social media advertising.
Jonathan Leonard, Founder of Leonard Financial Solutions, scrutinized his firm’s traditional marketing funnel model. He was tired of wasting time and money on lackluster initiatives.
“I was putting a lot of time and money into marketing activities but just not seeing the results,” Leonard said. “I began to realize the limitations of traditional methods and sought a change, switching to virtual sales utilizing social media ads, leading to significant business growth.”
How did he do it? Leonard started recording videos targeted towards potential right-fit clients – seniors and retirees who might need help navigating the shift to Medicare, building up and tapping retirement accounts, and accessing annuities, Medicare Advantage plans, life insurance, income protection insurance, and other financial products. Then he began using the videos as ads on Meta’s social media platforms, Instagram and Facebook.
Initially skeptical about the effectiveness of paid social media ads versus simple organic posts, Leonard was surprised by the positive results.
“In good months, I’m meeting with 50 prospects a month. I’ve seen many benefits by improving my marketing funnel,” added Leonard, “which at one time included the usual array of webinars and in-person seminars. For instance, I closed a $5 million annuity deal, making my firm’s largest case, while my improved work-life balance allows me to spend more time with my family all while achieving business success.”
Leonard’s experience exemplifies the evolution of lead generation for financial advisors in 2024. Here’s why more and more advisors are taking a different approach.
1. The traditional funnel is flawed
At its core, the traditional marketing funnel is linear, guiding potential clients from initial awareness through engagement, culminating in conversion. While theoretically sound, this model assumes a single journey for all consumers, which doesn’t hold up under the complex and dynamic nature of social media interactions. Specifically, on platforms like Facebook and Instagram, where algorithms prioritize user preferences and behaviors, the expectation that engagement naturally leads to appointments or conversions is often misguided.
2. Platform dynamics and user intent is better on Meta
The algorithms that underpin Facebook and Instagram have a profound understanding of user behavior, allowing them to deliver content that matches individual interests and intentions. When users are actively seeking solutions, these platforms are capable of presenting advertisements that directly address their needs, bypassing the preliminary stages of awareness and engagement that the traditional funnel emphasizes. This nuanced understanding of user intent highlights the need for a more targeted approach in advertising strategies.
3. Direct targeting is powerful
Financial advisors can benefit from adopting a strategy that focuses on direct targeting by recognizing the capabilities of these social media platforms to pinpoint user intent. Instead of casting a wide net with the aim of gradually nurturing leads through the funnel stages, a more effective method involves directly targeting individuals who are already in the decision-making phase. This approach leverages the platforms’ algorithms to connect with users who have demonstrated a readiness to take action, such as booking an appointment, which increases the efficiency and effectiveness of advertising efforts.
4. Data can be leveraged for precision targeting
Utilizing proprietary data or leveraging platform tools to create lookalike audiences based on the characteristics of ideal clients can significantly enhance targeting precision. A lookalike audience on Meta is a way to reach new people who are likely to be interested in your business offerings because they’re similar to your best existing customers. This method ensures that advertisements are shown to individuals who share similar traits with existing qualified leads, thereby reducing waste and improving the likelihood of conversion. By focusing on users who are predisposed to engage with financial advisory services, advisors can streamline their marketing efforts to yield better results.
5. Advisors can educate and qualify leads simultaneously
Abandoning the sequential approach of the traditional funnel doesn’t mean compromising the quality of interactions. Advisors can attract genuinely interested prospects by providing valuable content upfront – such as educational videos on key financial planning topics. This content not only positions the advisor as an expert but also allows potential clients to self-qualify by booking an appointment directly from the educational material. This strategy effectively combines the education and qualification steps, directly leading to more meaningful engagements.
6. The most efficient client acquisition strategy
The digital marketing landscape demands a departure from traditional funnel approaches, especially for financial advisors utilizing social media platforms. By understanding the unique dynamics of Facebook and Instagram and adopting strategies that capitalize on direct targeting and educational content, advisors can bypass the inefficiencies of the traditional model. This tailored approach not only aligns with the behavior of social media users but also enhances the potential for generating qualified leads, ultimately contributing to a more successful and efficient client acquisition strategy.
Alex Khassa is founder and CEO of Clients Blackbox, a marketing partner to some of the fastest-growing financial advisory and retirement planning firms in the USA. Their strategic demand generation capabilities are designed to elevate their clients’ visibility among millions of prospective clients, facilitating engagements with affluent pre-retirees and retirees. Learn more at https://clientsblackbox.com/
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.