As a financial advisor, marketing can be a significant challenge in the financial services industry. One of the fundamental issues is that the industry’s revenue model is commission-driven, and this creates challenges for advisors. The wholesalers have been put in a position that’s difficult, and they have been commoditized. This has made it challenging for them to compete as wholesalers based on the products.
To compete, advisors have looked to the wholesalers to solve their marketing challenges, but the wholesalers have taken on a role that they were never meant to fill. They market as inefficiently as advisors do, and it has been disappointing for advisors.
To set things straight, it is essential to understand the business models of the wholesalers and vendors. It doesn’t make them bad people, but advisors need to imagine that they own an IMO or FMO. They have contracted advisors, and they make their money on overrides when people write business. So fundamentally, there is almost a disincentive for the wholesaler to come up with any creative solution to seminars because seminars work really well.
For vendors like Facebook or direct mail, they also have a disconnect in their business model. The more direct mail you send or the more you spend on Facebook ads, the more money they make. But for advisors, they would like to get more seminar attendees for less mail cost.
Once advisors understand these broken industry models, they can work with these partners to help them understand that they will ultimately write more business and be a much more successful advisor, which means the wholesalers and vendors will be much more successful in the long run. But as long as advisors keep looking for a solution to their marketing challenges from the wholesalers and vendors, it will not be an acceptable way to run their practice.