As a financial advisor, finding new ways to generate business is an ongoing process that may take up a substantial portion of your time. While the Do-Not-Call registry is making telephone solicitation increasingly difficult, finding effective alternative methods of marketing can be equally difficult. Networking both with prospects and with other professionals is a key lifeline for most advisors, but it is generally most effective for those who are firmly established in the business.

Those who are new to the business are discovering that new ways of marketing oneself are becoming necessary. Read on as we explore some of the ways in which advisors are increasingly choosing to promote their businesses.

SEE: Alternatives To The Cold Call

Financial Advisory One-Stop Shopping
One method of "prospecting" that advisors are increasingly turning to is offering multiple lines of business or service. This can have several advantages, as it allows for advertising in previously untapped venues. More importantly, it allows advisors to prospect their current client and prospect base for more than one kind of business.

Many financial planning firms now offer "one-stop shopping," encompassing investments, all lines of insurance, income tax preparation, mortgages, comprehensive financial planning, business and estate planning, and much more. As stated previously, these firms are often able to get additional business from clients and prospects in some or all of the other areas of planning that they offer. Obviously, this can substantially leverage their profits with virtually no additional expense.

See: Boost Earnings Through Financial Planning.

Three Leader Lines
If you are seriously considering following this path in order to grow your business, one important factor to consider is that some products and services will lend themselves more readily to marketing to the general public than others. Three main types of business that fall into this category are property and casualty insurance, income-tax preparation and mortgages. Because all three of these are needed by virtually everyone at some point, they can be considered good "leader" lines of business to offer. Then, once a relationship has been established, it is much easier to generate additional business in other areas.

Income-Tax Planning
Income-tax planning is perhaps the one of the easiest ways to get new customers in the door. While more and more people are now able to do their taxes online, actual tax planning is much harder for the do-it-yourself segment to obtain.

The ability to offer this service provides advisors with an enormous advantage over the competition. This is because customers that pay to have their taxes done professionally are more likely to have complex returns, which often results from having investment, self-employment or rental income.

But more importantly, because all taxable income from all sources must be reported, simply preparing the return will provide an excellent window into the client's current financial situation. Advisors will soon discover that while many prospects may be loathe to give up their personal financial data, those same prospects will think nothing of divulging their entire financial lives to their tax preparer, regardless of what other products or services he or she may offer.

Doing taxes can provide a convenient end-run around many of the emotional barriers and obstacles that can often surface during any type of sales-oriented, information-gathering interview. It also often provides a more accurate picture of where a client is financially than the client can provide, even if he or she is willing, as many times clients will not have the tax knowledge needed to know if a problem exists.

Mortgages can be an even more effective way to generate business, if for no other reason than the amount of personal financial information that must be disclosed. Borrowers must provide not only their last two years of tax returns, but also their credit reports and a complete cash flow and balance sheet statement.

Furthermore, this is a golden opportunity to sit down with prospective borrowers and talk about their budgets, debt retirement and general financial future goals. Most mortgage prospects are already thinking about these things when they are trying to buy a house, so the emotional hurdles are usually much smaller in this context than normal. Mortgages also provide a specific opportunity to sell life insurance, whether mortgage-term or universal life insurance, which can accumulate enough cash value to pay off the mortgage if necessary.

Property and Casualty Insurance
Lastly, selling property/casualty insurance, especially homeowner or car insurance, can greatly expand an advisor's client base. If the advisor also offers mortgages as a service, homeowners' coverage would complement this service. As long as the advisor can offer competitive rates, he or she will bring in business that might not be reached otherwise.

Balance Business Volumes with Work Expectations
One critical factor for advisors to remember, however, is that all additional lines of business will bring additional work - and additional liability. Realistic cost versus profit projections must be run before venturing into a new line of work; there must a reasonable expectation of profit from the new product or service offered before adding it to one's business.

Income-tax preparation, for example, will require that the advisor deal with a host of new issues that go beyond actual tax preparation, such as setting up tax payment plans, dealing with the IRS and state tax offices, filing late and extended returns, and much more. The advisor must be prepared to deal with those issues before branching out into this line of service. Mortgages and property-casualty insurance likewise have their respective issues to contend with.

However, in most cases, for the advisor who is prepared to add an additional line of business, doing so will lead to an increase in business that far outweighs the risks and drawbacks.

Related Articles
  1. Entrepreneurship

    10 Characteristics Of Successful Entrepreneurs

    Do you have the qualities of a successful entrepreneur? Those who do tend to share these 10 traits.
  2. Investing

    5 Up and Coming Social Media Startups

    Although the days of Facebook's dominance aren't close to being over, here are some new creative platforms gaining traction on the worldwide web.
  3. Your Practice

    Advisors: $240B in Fees Up for Grabs by 2030

    Advisors have an opportunity to win generational assets over the next 15 years. Here are some tips on how to cater to different demographics.
  4. Your Clients

    How Advisors Can Make the Most Out of Volatility

    Advisors can use market volatility as an opportunity to enhance their value to their clients and grow their practice. Here's how.
  5. Personal Wealth & Private Banking

    What People Hate About Financial Advisors

    Advisors need to make a living too, but doing so by cutting corners at a client's expense isn't right. Here are the top complaints against advisors.
  6. Taxes

    Confused About Estimated Tax Deadlines for 2016?

    If you run a business or have investment income, pay attention to this year's estimated tax deadlines. Here are the details, and what's new for 2016.
  7. Entrepreneurship

    Are You Really an Entrepeneur? A Reality Check

    If you are going to be an entrepreneur, and you’re doing it on a shoestring, you’ll need more than a good idea. Here are some skills to master.
  8. Retirement

    Retirement Plan Tax Prep Checklist

    Here's a list of items you need to have in order by tax time, including paying attention to those pesky required minimum distributions.
  9. Your Practice

    Top Insights Into Winning More Wealthy Clients

    The upcoming young and wealthy client class is like none other when it comes to wealth advising preferences. Here are some hints to what these folks want.
  10. Entrepreneurship

    Digital Nomads in the Modern Economy

    Digital nomads compose a growing portion of the modern economy.
  1. How Long Should I Keep My Tax Records?

    The Internal Revenue Service (IRS) has some hard and fast rules regarding how long taxpayers should keep their tax records. As ... Read Full Answer >>
  2. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  3. Is homeowners’ insurance tax deductible?

    While your fire or homeowners' insurance premiums may be included in your property payments, they are nondeductible expenses, ... Read Full Answer >>
  4. Are mutual fund expense ratios tax deductible?

    The short answer to whether mutual fund expense ratios are tax deductible is "No," but the long answer, however, is more ... Read Full Answer >>
  5. Can the IRS withhold your tax refund?

    If you have any outstanding federal tax or state income tax debts, the IRS may levy any federal tax refunds or state income ... Read Full Answer >>
  6. Are shares of stock escheatable?

    Some investors are surprised to learn financial assets such as shares of stock can be escheated, or seized by the state. ... Read Full Answer >>
Hot Definitions
  1. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  2. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  3. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  4. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
  5. Godfather Offer

    An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition price's premium ...
Trading Center