In this episode of Craft On Tap, Stephen Beach and Faustin Weber break down why paid ads consistently fail for financial advisors, share real case studies, and explain what works for generating qualified leads.
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Co-Founder Stephen Beach & Strategist Faustin Weber discuss financial paid ads.
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Transcript:
Stephen Beach: Hi folks, welcome back to Craft on Tap Podcast, growth marketing for RIAs. I'm your host, Stephen Beach, and my co-host is Faustin Weber. Today we're going to talk about paid ads.
So we get this question a lot about, "I have a lot of good referral leads. I've grown my business through my presence, especially locally in the community. I've built my book off of strong client service, and naturally, I've gotten a lot of referrals to good clients that I've worked with for years. I've got that figured out. Now I need to open up a new channel to drive new revenue for my company, and I want to do that through paid ads."
So let's start there. When somebody comes to us with this question, usually my first thought is you're trying to address something that is deeper than just figuring out how to do paid ads. So the first question you have to ask yourself is, what's really the driver of this? What's the cause of this? Paid ads are just kind of a symptom. This is something deeper.
So trying to drive new leads from another source - that's probably the answer, because you've already got the referral source figured out, right? So, not to overgeneralize, but that's what we see a lot of times.
If you're trying to drive new leads, that means you're trying to grow your business. If you're trying to grow your business, that means you are looking for the ideal fit clients. You know, say it's a million dollars and up in investable assets. That means you are looking for people who your team wants to work with and who you're uniquely qualified to serve, right?
So let's just establish that and get super clear on what that is, like what we're trying to do with paid ads first, before we say paid ads is the right avenue. So I would just caution you and say, let's start there. Let's establish what we're actually trying to solve for before we get into paid ads, is the answer.
Because as we're going to talk today, we're probably going to go for 15, 20, 25, 30 minutes about why paid ads is not the right answer if you're listening to this podcast. So just spoiler alert, executive summary. We're going to really try to dissuade you from using paid ads and explain why, using our experience as a marketing agency for RIAs, and then also using some anecdotal stories that we've got, and asking different questions than you've probably thought to ask yourself.
Okay, so that's number one. Let's get into the context around the platform. So paid ads can mean a lot of different things, right, Faustin? That means Facebook, LinkedIn, Instagram, Google - all these different platforms. They have different mechanisms where you can run paid ads. Talk to us a little bit about the variance in the structure of the ad platforms themselves.
Faustin Weber: Well, first, Stephen, I just wanted to say it was a really great monologue to start off the episode, so I appreciate you letting me talk.
Stephen Beach: No, that's what everybody wants, is kind of a monologue from me to start off. It's nice and monotone, that gets the energy going.
Faustin Weber: Yeah, it's going to be great. Our engagement rates are going to be great. But you did set it up really well though. The reason why so many advisors ask us about paid ads is because it just comes down to trying to generate as many leads as possible, right? They've exhausted all the sources, at least from their perspective, and so they're looking for people outside of the current referral sources that they have with their client base.
I think before we talk about platforms, maybe we just share the different types of paid ads that you can run. So the ones that most of the advisors are thinking of are those straight lead gen ads, right? So those are people that are actively looking for an advisor. They're typing in "financial advisor near me," or "financial advisor" in their city and state, or they're just actively looking for a partnership. That would be the first thing we want to be clear on, that's one type of ad.
Then another ad, which I know the funnel, the traditional linear funnel, it's probably not as relevant anymore, but it's something that most people understand. Further up the funnel would be those conversion-type ads. Let's say you're running an event, like a webinar, or you have something that you want them to download, like a nice white paper or a checklist, something that you're trying to get their contact information, where they might not be actively looking for an advisor or be interested in a partnership right now. But you want to get their contact information so that you can follow up with them, start a conversation, and then potentially nurture them with your email newsletters or some sort of email sequence that you have so you can continue to keep staying in front of them.
And then there would be a type of ad that you can run that's more of a personal or firm brand awareness play. This is what I like to call an audience-building ad where you're just trying to get in front of them, capture their interest, just get a little bit of engagement where maybe they follow your accounts on social media, for instance, so that you can continue to keep targeting them at least organically.
Or you're just trying to capture their attention in some way so that they think of you over time. This type of ad could work really well actually, if you've already started in a sales conversation with somebody, and you could potentially retarget them or retarget their company. This is more on the B2B front, but retarget their company so that their employees continue to see your brand in some way.
So three different types of ads. I'm oversimplifying it out there. If anyone's an ad expert, you know, there's obviously, if you try to open up any of these platforms and try to run an ad, you actually get something like 20 different objectives that you're trying to do. But for our purpose, it's people that are actively looking for an advisor, and you want to capture that demand. You're trying to convert with more of a middle of the funnel type offer - webinar, download - or just more of a brand awareness play. Did I miss anything with those three, Stephen?
Stephen Beach: No, that's great. I would just add the retargeting thing is - because people may be less familiar with that - that is just for those who aren't as familiar, that is just saying somebody who's familiar with your company, maybe you've met with them, and they said, "not now, maybe later." Or they said, you casually met someone at an event or whatever it may be. But now you just want your brand, your company name to show up in their world on the internet over the long term. Those are retargeting ads, right? So it's like you're trying to reenter their subconscious, if you will. You're trying to reenter their conscious from their subconscious.
So on LinkedIn, you'll see these that are just brand ads on the side. It may not even be really asking you to do anything. It's just kind of showing you the company name and the brand. So yeah, just to clarify that.
Faustin Weber: Nice. Okay, so let's talk about platforms. So starting at that bottom level, right? Like that one where you want to capture the demand. It's straight lead gen. Oftentimes, we see this with people trying to target keywords like "financial advisor near me," or "financial advisor" in their local city and state on Google.
And/or they use something called Google Local Ad Services, right? So there's two different types of ads that you can run from Google itself. One is more targeted on specific keywords. And then the other one is for the type of service type searches, right? So if you've ever looked for a plumber or an electrician or anything like that, and you see the sponsored individuals that come up or the sponsored links.
Financial advisory services work in a very similar way. So if you type in "tax planning near me" or "financial planning near me," or "investment advisor," it will show different listings off of your Google business profile, but you can pay for local ad services to be listed as some of the top sponsored advisors. Usually, it has a little check mark that says verified, and then it shows that you're sponsored. So we see both of those, right, in terms of that lead-gen type ads. And we have run both of those with our different clients. So that's typically what you would think of in terms of the ad-gen.
I would also put in the big platforms like Smart Asset, Zoe Financial, all the different competitors, the ones that are getting startup backing. Those would be all different types of websites that are targeting those bottom-of-the-funnel type demand-capturing sources. So that's another thing that we're going to discuss, right, is that if you're trying to run any sort of ad spend, you're competing as well against these Smart Asset, these Zoe Financial, Area Investing, all sorts of different - hundreds of thousands of dollars a month, if not millions - to try to generate leads for other firms.
And then you start thinking of LinkedIn, Facebook, Instagram, some of these platforms. That's typically what we would see as more of a conversion-type ad play, right? Where you're able to target, let's say you have a webinar signup on LinkedIn, for instance, and you can go through and go industry by title, by role, by age, and really target specific people in the niche that you're trying to host a webinar for.
Very similarly with any sort of white paper or download that you want, you can do the same thing. On Instagram, you can do something very similar. And Meta allows you to be able to go back and forth between Instagram and Facebook. And so that would be more of that conversion play would be more on the social platforms and then brand awareness as well, right? When you go in, if you don't necessarily want them to share their information, but you just want to get in front of them, the social platforms like Facebook, Instagram, Threads, all the Meta platforms and then LinkedIn are different types of ad platforms that we've used for those middle and then top of the funnel type searches. Did I miss any other types of platforms, Stephen?
Stephen Beach: There's probably another one being invented by Elon Musk or Donald Trump or something else. But those are kind of the main ones that we've dealt with. Those are the main ones that we've got experience in.
Faustin Weber: Yeah. Nice. Okay, so let's start at the lead capture, right? Like capturing the demand. So we have tried this - we have tried with local ad searches, and I want you to picture your prospective client, right? They have a million plus in assets, some of them have 5 million plus, 10 million plus potentially, right?
Do you think that they are going to be searching for a financial advisor near me? Right, the majority of them. And just stop right there because I think that's a key point that we've discussed internally so much that the idea that someone who has that level of assets would not be first turning to their inner circle of friends or family members, that they would instead be to throw it out there to a Google search is just, it doesn't happen.
It doesn't happen as often as you might think. And that's one thing that we tell advisors, right, Stephen? Is, we've interviewed our clients' clients a number of times and asked them this question point blank. And I've gotten this response, I think 15 different times in the last year from our clients' clients. "Well, no, I wouldn't turn to Google for someone in my inner circle. My advisor, my investment, my financial planner, my investment advisor. They know everything about me. I consider them to be one of my inner circle professionals. I'm not going to just do a random Google search to find them. I'm going to ask my friends and family."
And so I think this is just the key point, right? To keep in mind whether it's a partnership with Smart Asset or a partnership with Zoe Financial, or just trying to run these local ads on Google. You have a very narrow group of people, right, that you're already targeting, and it is even a smaller window of people who are actually going to find an advisor like that. Right?
Stephen Beach: Right. Like you said, point blank. You're not going to find people who have a million dollars in investable assets or more at scale via ads. It's just not going to, you're just not going to convince us that that happens. Sure, a blind squirrel finds the nut every now and then. Right? You might catch a stray here or there. Like we've seen it. I think, you know, we've been in the space five years running marketing programs for our RIA clients, and we've seen it maybe one time.
We haven't done a ton of, we haven't done millions in ad spend, but still, it's been years, and we've got very little results to show for it from the ad standpoint. So lucky for you, the listener, we've actually spent the money and our time to figure this out so that you don't have to, but it's just, you're not going to convince us that that's going to happen because the way that, yeah, like you said, people work and people, who they trust. And you know that this industry is so much built on trust and relationships, and so that's where people go first. So yeah, at scale, you're not going to, it's just not going to work. It's just not going to work.
Now, if you're going after smaller clients, I'd say maybe like a caveat. You know, if you're going after students, like fresh out of school students who are trying to figure their way out of student debt or whatever it may, that might be different. We haven't tested that. We've gone after, you know, our clients who want clients who have, you know, ideally a million dollars or more investable assets. So it's a different audience, but yeah. Right. We've tried all different kinds of things with different clientele, with different locations, with different platforms, with different ad types, with different offers, and it just plain hasn't worked. And we're going to get into the reasons why and what you can do differently.
Faustin Weber: I think that was really well said. Just a couple of stories to add to your point. We have spent thousands of dollars a month on the local ads that I was just referring to. And we got our firm and the individual that we wanted to position as the managing partner at the very top of all localized searches.
And there's hundreds of searches for this region. It was in the southeast. We confirmed that there's hundreds of searches every month. We were right at the top, and what we ended up getting was many, many calls and many, many lead forms that were all unqualified, right? Like people from all different types of countries, people who were looking for mortgage help, for debt consolidation, like all sorts of financial-related topics that our clients who are looking for more affluent 1 million and up investors had no interest in trying to help. Right.
And most of our firms that we work with are really nice people. So they would talk them through the ins and outs when they got on a call, but it ended up being over like a three to six-month period. We ended up just deciding, at least for this one client, we're not going to continue to do this. Because it's actually costing not just the ad spend, but also the advisor's time to be able to work with these unqualified people. So generated a lot of leads, they just were not qualified.
The other thing that I think is really important, and I've already said this earlier, is that the Smart Asset, the Zoe Financial, all these big competitors are running ads. They're bidding a certain amount to get in the placement for all these people as well. Right? So when you try to do local ad services, or you try to do just regular Google ads, you're competing against these mega corporations that are going to be able to spend more on a bid basis, right?
So you really would have to spend a lot, a lot of money to try to make sure that you're taking away from the people that they're getting. And then let's talk about the leads that they're getting. Right. I mean, I'm not sure if our listeners read the RIA Biz article. We can put it in the show notes, but it was from 2024. Kitces featured it, I think it was from the spring of last year.
But it highlighted that firm that was, I think the name was Pure Financial Advisors. They spent 10 million with Smart Asset over two years, 10 million with Smart Asset over two years. So just to put that in context, they're spending 10 million with Smart Asset. Imagine how much Smart Asset is spending to generate the leads to give them $10 million worth of leads, right? Pretty significant, I would say.
And out of those 10 million, they generated 1 billion in net new assets. So definitely ROI. Right? They were able to generate 1 billion in net new assets. But here's the thing, they had a 96.5% failure rate with the leads, so they actually broke it down.
They had out of every 100 leads that they got, only 20% actually scheduled calls, and then only 65% of that 20% actually showed up to the calls and didn't ghost them. And then out of the ones that showed up, only 25% closed long term. So the final conversion rate after spending $10 million was three and a half percent.
And in order to even get to that three and a half percent, Pure Financial had a 20 point checklist of different touch points, manual and automated, and a nine-person development team. So if you just think about your independent practice, right? You know, if you have a billion, multiple billions of assets, or if you're just trying to get started, you know, with 50, a hundred million, this is who you're competing against, right?
And if you wanted to invest in a platform like Smart Asset and you wanted to, even if you wanted the ROI from spending 10 million with them, you're still going to have to establish an entirely robust sales team. And then there's all sorts of other implications, like do you want to hire five to nine new business development people that follow up all the time. And don't necessarily reflect your culture of service that you're trying to build as an independent practice. Do you want to become the next wirehouse? Because that's essentially what you're leading towards with that kind of investment from my perspective. So anyway, just wanted to bring that up. Those are all considerations when you're going to launch into a potential paid ad campaign.
Stephen Beach: Yeah, that's really good. I think, a couple of things to add that. This is like the ultimate David vs. Goliath. This is a really good example with this Pure Financial group. But yeah, they also have, so they have a pretty large business development team of trained business development professionals.
Then they also have a sizable marketing team who's running radio shows, podcasts, webinars, white papers, all the fuel for the ad campaigns themselves, and then the 20-point check. So they're doing a lot of things right. And they're still only hitting 3.5%. And then to your point, are they the best-fit clients?
You've chased them down, right? You've chased them down. And to some people, they say, okay, now the model works. Like they proved it. Other people would say, you know, this is the wrong type of relationship that I'm developing, to set the expectations in the first place. And, who knows, this just happened last year.
We don't know the lifetime value of these clients or what their churn rate is, and so on and so forth. But that would be really interesting to see in five years or 10 years, if these clients have stuck around and to what degree, but they're doing all these things. They're only getting 20% of people to show up to a call, even after they're doing all the campaigns correctly.
Like they've nailed the messaging, the imagery, the placement, the bidding on the ads, the optimization, the targeting, all these things that go into it, and they're still only getting 20 percent of people to show up for a call. It's pretty wild. I'll say too, you know, it's not just this group with Smart Asset, go to the Fisher Investments website. Creative Planning is a big - they spend a lot of money on ads. And again, they have huge marketing teams and huge business development teams that are there to work the whole system. You know, they've built a holistic system around it. And for them it works, but they're also, I know for a fact like Creative Planning and Fisher, if you go check out their ads, it'll be around adjacent services to wealth management, or to financial planning or investment management. It might be something around estate planning or, you know, it might be your guide to estate planning or your guide to taxes, things like that. And they kind of hook people with these adjacent services or adjacent offers. And then the nurturing starts. And the nurturing has to be really good. And it has to be long-term nurturing. I mean, you know, marketing work that's email follow up, text messages, maybe phone calls from the business development team that are people who are qualified to speak on these types of things. It's just so developed and for the people who are listening to this, know that's kind of what we're going up against. If you want to run 5,000 a month in ads or something, we've tried to crack the nut. It's really hard to find a good way to success when you're going up against these behemoths, in Creative Planning, Fisher, the groups that are spending this much money on Smart Asset and have built out the teams.
Faustin Weber: I think you make a really good point there that even some of the behemoths run adjacent type service ads versus leading into the financial planner or investment advisor type ads because they realize just what we've been talking about, that the demand of qualified wealthy individuals is not there for just bottom-of-the-funnel type searches like that.
Stephen Beach: Yeah. It's maybe like, they're trying to seek out, they're trying to land somebody. It's not a bait and switch, really, but they're trying to land someone and then explore, you know, like seed and grow is a sales term people have used. It's like they're trying to land somebody for estate planning needs and then dive in with their discovery call process to see if they have accounts that they can move over to see if they've got a windfall coming or whatever it may be, if they've got a job, a career transition coming up or whatever it is, to see if there's other opportunity there. Because yeah, those folks are not at scale. They're not clicking on the ad that is directly for wealth management or financial planning off the front. When they have a million dollars or more in assets. Right. They know it, and we know it and now you know it. Because you're the lucky listener here.
Faustin Weber: Yeah, and we'll say too, I just helped an advisor who put out something around constantly getting pitched by private equity people to try to move their clients over with this investment or not, and how they were just cautioning other advisors, just like you guys are getting pitches all the time for this.
I know. In the same way, you're getting pitches from marketing ad agencies, right? Who are telling you, who are telling you that they can guarantee you leads. And I know this because our clients have experienced this, right? Like they've even gone down the path, right? Where there are different members of leadership who get really attracted to this guarantee of leads and we've actually tried to engage with it and spend three to six months doing it, and no leads have panned out, right?
Because there's just, it's not a you can't. You can't, this isn't a... I'm trying to think of the best way to put it. It's not, you can't just put money in and get money out in an easy way. There's no easy way to generate leads as a firm. It's just not, you're just not going to be able to do it.
Even with the most sophisticated ad, or the smartest, most clever way that you can think of, which is how a lot of these agencies pitch it, it's just not going to work in the way that you would hope for.
Stephen Beach: Here's a good way to think of it, too. If it was this easy, people, everyone would be doing it right? And we haven't figured out a way to crack the code because it's not crackable, it's not the right, we're not even trying the right code, you know, we're at the wrong place.
Faustin Weber: Yeah.
Stephen Beach: I think, like you said, yeah, we've had a couple of clients that were really interested in paid ads. You get a different on the management side that says, okay, let's just try it. And let's see what happens. Worst case, we waste three to six months, no big deal, no problem.
But I think one takeaway there would be, just make sure if you can... Well, you can, because it's up to you if you want to hire the people or not, write into your contract that you have a money back guarantee if the leads don't pan out. And you can quantify that too, like qualified leads that close into clients.
If they don't, if they don't agree to that, then run away as fast as you can. Because what they're going to do is set up all these things, make all these promises, run the ads, and then blame the lack of results on something else. And this happens over and over and over again.
People are just, we're looking for the easy way out, the silver bullet, you know, and we keep trying these different things because we need new clients. But the paid ads channel is just one where you're not going to find the results, and you're going to lose money and more importantly, lose time in the process. So, yes. I'd say run away. The biggest thing is, like you said, the worst thing than no leads at all would be unqualified leads.
Right? That'd be almost worse. Because then you have to waste the time to field the calls and field the emails, and then reply and waste your advisor's time on doing that. And we're getting leads, like you said, people looking for help with their mortgage. You know, people from India and Russia, you know, it's like, what is going on here?
I don't know how these, you pin down the targeting so much where we've got, okay, people who make this amount of money with this job title in this area, and blah, blah, blah, this age range, so on and so forth. And we're getting people from all over the world and they're 22 years old, and then they have student loan debts.
Like, what? So this didn't work. And now also Facebook or LinkedIn or Google, they will be very resistant to give you your money back for unqualified leads because that model doesn't work for them. So, again, just another cautionary tale, I guess, the unqualified leads that you're going to pay for. If it's with a company who's promising to give you leads, make sure there's a money back guarantee in there, because it's going to be a complete waste of time and money. Hopefully we've said that directly enough by now that people are getting the message.
Faustin Weber: Yeah. A couple of types of ad spend that I think are valuable and that I have seen yield the type of results that we're looking for. I thought it's important, just a few asterisks, I would say.
Stephen Beach: Let's try to be a little more positive, you know.
Faustin Weber: Yeah, I know. You need to get on your soapbox every now and then when it comes. This is great. This is a great forum for that, you know? It's very healthy. I would say that we have had some success with different types of campaigns on LinkedIn. It has to be a very narrow focus and a very niche group in order to get that success.
So let me just give you an example of how I would think about the investment in paid ads paying off, right? I would not spend any sort of bottom of the funnel. I think we've made that clear. You're not going to capture that demand. But I would say that, let's say that there's a company that's about to IPO, for instance, right?
Or that there's been an announcement that an IPO is upcoming, and you have a resource that you want to get specifically for that company in the hands of employees at that company to try to drive brand awareness for your firm and also to provide a helpful piece of content that may engage them enough to think about the potential that they might need, to sort of create demand, if we want to use that word, instead of capture.
I do think there's some room there to spend on the brand awareness type ad. Let's say there's a company that's about the IPO. You have a guide on how to prepare for an IPO specifically geared towards that company's employees. You can target that company on LinkedIn and you can feel pretty good about, that's why I think LinkedIn differs from Instagram and Facebook is that people that we've generated off of Facebook and Instagram for webinar signups, downloads, you don't even know if their email's correct, much less you don't know anything about their actual professional information, and a lot of times, the first and last names don't even match up with anybody who actually exists in real life. So they're all just sort of made up. But on LinkedIn, you can feel pretty confident a lot of times, especially if they're attached to their company, that that's a real person that can potentially take some sort of action. So we have had success narrowing the focus and saying, I'm going to target everybody in this company with this guide to an IPO. There's an actual catalyst for them potentially reaching out to an advisor and you're getting in front of that catalyst with a guide, and you're going to spend a certain number.
I'm going to be very realistic about a daily budget. There's not a lot of other firms or of these Goliaths, as you say, Stephen, that are running a particular type of ad. So I know I'm going to get a pretty good cost per click. I'm not going to spend that much, but I'm going to get in front of these people. That would be a really good example of how to utilize paid ads.
That is, and we didn't lead with that though, I think, Stephen, because most people don't think of paid ads like that. But that sort of sophistication where you have a really nice landing page on your website that thinks through how to potentially convert, but also provides enough value that they don't feel like it's going to be salesy.
And then maybe you couple your ad with an outbound sales message to them, right. Or a connection request to them at the same time that the ad is running. That level of sophistication, I think is worthwhile of a discussion. In terms of, you know, it doesn't necessarily mean that I want an ROI in the sense of like, I need three clients out of that, but maybe our metric is I want 50 new followers of that company so that I can continue to nurture them with my social posts moving forward.
That I think is something that has a little bit more of a realistic chance and we have had some success in that realm. Would you agree?
Stephen Beach: I like that a lot. Way to shift to the positivity here. That's really well done. So I like that a lot. And what I heard you say, though, too, is just this is the paid ad. This is one touch point in a series of touchpoints. It's like a playbook, if you could call it that, or the roadmap. Whatever term you want to use. It might be 20 steps, you know, it might be 10 steps, but it's like, it's something that's supporting the overall effort. It's not the one thing that's going to get me three new clients, right? Because clients are also prospects, they don't kind of work like that either.
They're going to, maybe they see your ad, maybe they see you in their feed, maybe they see you in a DM. Slide into their DMs once, twice, three times. Maybe they come to your website, they find that landing page you're talking about, that's all about their company and their IPO upcoming and what they should do.
And then they go to your videos that are on your website and then they get an email newsletter from you. And so there's just all these, I just listed off like eight things. It's this holistic playbook that you run. So. I think, I agree. I agree with that. Like, something like that could be successful of, not just a brand awareness campaign, but something to kind of nurture, specific to an event like that.
Again, it's super targeted. You can kind of slide under the radar of the Goliaths in that way, right? They don't want to do that in, on that granular level, like what you might. So, more power to the firms that are niched down, who can really think about this more strategically. So yeah, I think something like that has potential. But again, you have to think about like the accompanying steps, like everything that's around it, you know, the things that you should be pairing it with.
Faustin Weber: Yeah, I think that's a really good point. It's just the ad is just one element of a holistic look at whatever that tactic is that you're trying to do. Another one that jumps into my head is we have had some success with webinar signups using LinkedIn. So create an event either under your firm or your personal account, and then you are able to do outreach to all the individuals that you're connected with that fulfill a particular type of criteria that you want to push to your webinar. And then you can also promote, you know, a couple of posts where you show the value that you're going to get in your webinar using a thought leadership ad on LinkedIn.
So that would be like an example of a conversion type ad, but you're kind of almost doing like a little guerrilla marketing where you have like a really valuable video post that talks about the upcoming value of the webinar, and then you push that to particular people that may fit the target criteria of people that you want to attend the webinar.
Again, are you relying solely on ads to get you signups for the webinar? No. You're thinking of people on your prospect list that you can send personalized invites to. You're doing outreach on LinkedIn, you're doing all sorts of different connection requests to people to try to build those relationships.
You're sharing organically across different channels about how they're going to provide a lot of value in this event. But then you're also using a little bit of ad spend as well to try to increase awareness to that particular niche. Very similar to the pre-IPO example, right? Like as long as you've narrowed it down where you can really feel good about the what you're spending and that you're just spending's actually going to be in front of qualified people. Again, LinkedIn's good for this even though, even though you can spend a lot of money on LinkedIn really quickly, if you're not careful, which it just evaporates on LinkedIn, you're like, oh, a hundred dollars just went and you know, 10 minutes, like what happened?
I know from experience early on that we did that a few times, you're like, Ooh, okay, alright, we need to slow this down a little bit. But as long as you're being really focused with it, it can yield the right results. And as long as you have expectations that are, that, hey, this is, this spend is not going to equate with a necessarily client right now, but we have other purposes for what we're going to do with those conversions. Right.
Stephen Beach: Right. Really good. The only place you can spend money faster than LinkedIn ads would be like a craps table at a casino where the money is suddenly just gone. It's just like, oh shit, there was $200. It's like that, you know?
Faustin Weber: Yeah, I don't know if we want to like start referencing South Park, but there's a great South Park episode where, I think it's, Stan goes in into the bank and he has a hundred dollars that he got for his birthday, and he says, I want to, you know, put this a hundred dollars into a bank account.
And the guy behind, the banker behind the counter goes, alright, I'm investing it into a couple of different mutual funds, and it's gone. And he is like, what? What do you mean? He's like, and it's gone. Sorry, your money's not there anymore. Right?
Stephen Beach: Got to bring a hundred dollars back. Yeah,
Faustin Weber: Yeah, that's how I felt with LinkedIn when I'm looking sometimes, you know, a few years ago when I'm looking at the client's money, I'm like, oh, whoa, we just spent $150 by 6:00 AM and, I'm not sure exactly what we should do now.
Right. So we've learned a lot right. From trial and error and, and now we have a really good sense, I think, of exactly how to best, maximize our, our clients' spend. And it's, it's not just by pushing more and more money into the platforms.
Stephen Beach: Yeah. I'm not the best at analogies. My brother-in-law, Boston Cardinal is, but I feel like the, what you just described, like the LinkedIn thought leadership post. Say you do a nice post on LinkedIn that's getting some engagement, you know, some likes, some comments, maybe some reposts, that would be a candidate for sort of boosting it, and I feel like it's kind of like, you're already running, but now you're getting a tailwind, right? A bit of a push. You know, the tailwind costs you 50, a hundred, 150 bucks, depending on what the campaign is. You could be spending a lot more than that if you're really... Like the webinar one is a good example, if you got some traction around an upcoming webinar that you want to generate some more awareness and conversions to register. For people to register for the webinar. But yeah, it's more of like a boost than it is the actual, the initial kind of starting, you know, of the run. So that's how I'd look at it.
Faustin Weber: Nice. I love that. Just a couple of other quick things to touch on. First, a thought leadership post, just to clarify, I'm not sure if we talked about this, but it's just where you have like a normal post on LinkedIn and then you can just promote it as an ad. Right? So I think your way of saying to boost it, you boost it on a company level, but for the personal post you can, you can essentially boost to whatever audience you want. Someone's individual LinkedIn post, which we have seen do pretty well. I think LinkedIn's trying to move to that overall as a platform by suppressing creators and different points. So I think that that's going to continue to be a good use of funds as long as you think through the strategy.
We have gotten a lot of requests like, so what about like non-traditional digital media, like, you know, smart TV ad placements and you know, different, even like, let's say commercials, right? And we've gotten a lot of different requests over the years for those. We have not invested a lot of our clients' funds in those types of accounts.
We've just felt like the cost has always outweighed the potential benefits based on what we know about ads. So I just wanted to add that, that those were not, those are not things we have a lot of experience with in terms of experimentation because we've never felt like the offer has been something that we feel like a high probability of success.
You know, the Creative Plannings of the world, if they want to drop a few hundred thousand dollars in broadcasting, you know, up in your Roku TV. You know, I'd be curious to see how that does. And I have, you know, Creative Planning spends a lot of money on just regular, you know, commercials on TV and across different types of platforms as well.
But I don't think for the advisory practices that are not at that level, it ends up being a good investment.
Stephen Beach: Yeah, well said. If you want to dive into that, anybody, just Google programmatic advertising that'll lead you down a whole rabbit hole of things you probably haven't thought about. How we can put advertising in places that, it seems, it seems almost mind-blowing. Like we can place an ad in the doctor's office on a TV screen while you're sitting in the waiting room, you know, and we can target those people, like things like that.
Hypothetically so, to your point, we haven't seen a lot of good results with that. So it's been few and far between there. Yeah, I think, summary, do you want to summarize for us? Do you want me to, and then we'll wrap up?
Faustin Weber: Yeah, I think, you know, let me try to take a little bit more of an optimistic slant, right? Because I can feel like your, I can feel your summary coming on and you just might get back into the anger around the paid ads. I would summarize by saying that, you know, paid ads in itself is not a good strategy to yield new clients.
It has potential if you're willing to spend upfront $10 million, like Pure Financial, but you're going to have to invest a lot in failure, right? In the sense of you're going to need to have a whole team that's ready to cold call and get rejected a lot, and it just becomes an entire infrastructure issue for your firm if you're willing to go that route.
And you're not even really sure what the lifetime value of those clients is going to be, right? Because you obviously sacrifice a little bit of attention to detail when it comes to, you know, the types of clients you're bringing on when you have nine development people incentivized to generate new clients.
I would say paid ads, generally speaking, for the practices that we work with, have not been great on a lead gen basis, but they do have a little bit of possibility and potential. When you think about very niche, narrow campaigns where you have a catalyst or a real reason for someone to potentially reach out and you can provide a lot of value to someone, I would say on LinkedIn is a good platform to think about right now for using that. Because you can be assured, even though the cost is a little bit more on LinkedIn to some of the other platforms, you can be assured that the people that you're getting in front of are actually real people.
Stephen Beach: Good summary. No, I think that's about it. And then, you know, if you want to dive into more of like what other tactics to explore, I think we've got some other good podcast episodes. long story short. You know, our motto or sort of our methodology, revolves around marketing to your clients, not to strangers.
So really with the ads we're marketing to strangers. If we spend 80% of our time and money on marketing to your clients, we're going to have a lot better results. It's going to be a lot more cost-effective, it's going to be less time from you. And that's what we found over the last five years working as an outsourced CMO for RIAs.
So hopefully this was helpful. Hopefully it wasn't too negative. Hopefully, you're now a smarter, financial advisor, managing partner, around paid ads. And we'll be back with another episode soon. So thanks for listening.
Faustin Weber: Thank you.
Key Takeaways:
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The Wrong Channel for Ideal Clients: Paid ads are generally ineffective for attracting high-net-worth clients. Affluent individuals ($1M+ in assets) almost always find advisors through trusted referrals from their inner circle, not by clicking on a Google or social media ad.
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An Unwinnable, Expensive Battle: When you run ads, you're competing against giants like Smart Asset and Fisher Investments who spend millions and employ large sales teams to manage extremely low conversion rates. As one case study showed, a $10 million ad spend resulted in a 96.5% lead failure rate—an unsustainable model for most RIAs.
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Beware of Unqualified Leads: Many ad campaigns, especially on Google, result in a high volume of unqualified leads (e.g., people looking for mortgage help or debt consolidation). This wastes your ad spend and, more importantly, your advisors' valuable time fielding calls and emails that go nowhere.
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Where Ads Can Work (Hint: It’s Niche): Instead of broad lead generation, use paid ads strategically as one part of a larger, highly targeted campaign. For example, promoting a guide to employees of a pre-IPO company or boosting a webinar to a specific niche on LinkedIn can work for brand awareness, but it shouldn't be your primary strategy for new clients.
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