Can you organically grow a multi-billion dollar RIA?
Many of the large RIAs you read about got there because they acquired firms or they were part of a banking, accounting, or law firm that fed them a large number of clients.
Today’s guest, Scott Hanson of Hanson McClain, built the firm with his partner Pat McClain the old-fashioned way–one client at a time.
Using gorilla-marketing tactics, a radio show, and smart marketing, these guys built a $2 billion RIA with about 4,000 clients and an average account size of $500,000. Similar to Edelman Financial Services, Scott and Pat built a hugely successful RIA with relatively modest size clients.
I’ve known Scott for more than 20 years and in today’s show, we take a chronological look at what he systematically did to build a top RIA from scratch and the strategies he’s now using to keep the machine humming.
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Five Quotes From Scott Hanson…
1. You won’t build a billion-dollar RIA if your marketing plan consists of waiting for referrals to come in.
“The number one marketing channel advisors have is referrals, which means they’re not marketing, they just take what comes. They have three clients a year and they’re happy with it. For those that want to grow their business, they have to think a little differently,” said Scott. For example, the firm has been known to buy donuts and stand outside a company’s office and hand them out–along with a flyer inviting the workers to an upcoming seminar. “Sometimes these marketing ideas that might seem a little beneath you are some of the best things to do.”
2. A podcast or other long form medium is an excellent way to engage prospects and warm them up until the time is right for them to meet you.
Scott and Pat got started in the radio business more than 20 years ago “mainly because we looked around and saw a lot of other advisors successful in that area.” Today, radio is a dying medium and being replaced by podcasts. Scott and Pat still have the radio show because their target audience still listens to it but they also turn the radio show into a podcast. Scott believes the long form format of radio and podcasts “is a great format to build trust” with your clients and prospects. Currently, the podcast gets about 12,000 downloads a month–which is huge! The firm is just finishing an audio/video studio in their office as they see a bright future for media.
3. Your “storefront” is now your digital presence.
“Your website, your app, it’s that digital look and feel, that’s how consumers are judging you. More and more communication is going to happen that way,” said Scott. Technology will cause “relationships to happen in a different way.” Scott said, “I still believe it’s a personal interaction that most people want to have with an advisor but it’s changing and advisors need to stay on top of that.” And in a recent series of focus groups Scott confirmed that almost all of their clients are using smartphones, Facebook and even Facetime to communicate with their children and grandchildren. “Things are changing and having a nice looking digital presence and being able to communicate with clients remotely is going to be important.”
4. For a smaller RIA to compete, they have to be a big fish in a defined pond.
“I would be trying to make myself a big deal in whatever market I’m in. We’re in Sacramento, it’s a relatively small market, kind of a cowtown here but we’re a big fish in a small pond and we work hard. I wrote a column for the Sacramento Bee, the main newspaper for nine years, every week for nine years. We’ve done a lot of things to increase our visibility in our own markets.” This dovetails with what I tell my coaching clients–build client personas where you have an edge and go deep in it.
5. Like many other large RIAS, Hanson McClain separates business development from financial planning as it allows sales people to focus on selling and advisors to focus on taking care of their clients.
“We’ve always said that the firm is going to be responsible for marketing and setting appointments and then we hire good advisors who focus on serving our clients.” Marty Bicknell of Mariner Wealth Advisors, told me in an earlier podcast that they do the same thing. They have separate people to bring in the new business, serve as the advisor on that business, and even have a separate investment team. This highly specialized structure allows each person to focus on what they do best and generates above average organic growth and operational efficiencies.
Scott Hanson on consistency in the brand…
We are very consistent on our brand and our process, regardless of which advisor somebody works with it’s going to be a very similar process.
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