INSIGHTS
                     
Does Thought Leadership Matter for Advisors?

Nov 2017 by Hannah Grove

Does Thought Leadership Matter for Advisors - CoverIn a study conducted by iCapital Network with more than 800 advisors about their day-to-day business activities and ongoing practice development strategies, we learned that top earning advisors—those consistently earning $1 million or more in annual income—are four times more likely than their less successful counterparts to be actively working toward becoming an industry thought leader (see Figure 1).

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In a study conducted by iCapital Network with more than 800 advisors about their day-to-day business activities and ongoing practice development strategies, we learned that top earning advisors—those consistently earning $1 million or more in annual income—are four times more likely than their less successful counterparts to be actively working toward becoming an industry thought leader (see Figure 1).

The research indicates that just 13.4% of all advisors, regardless of income, are focused on positioning themselves as thought leaders, a statistic that helps to underscore one of the key differences between top earners and everyone else.

Figure 1 - ADVISORS WORKING TO BECOME THOUGHT LEADERS, BY ANNUAL INCOME Thought leadership has emerged as an important activity and one that is increasingly critical to remaining relevant in the 24-hour news cycle driven by online news sources and social media platforms. At the same time, it can be difficult to measure the effectiveness of thought leadership initiatives and demonstrate clear links to revenue generation, which means it’s still considered a nice-to-have rather than a must-have activity for many advisors.

So, what should advisors know about thought leadership?

IT CAN (AND SHOULD) TAKE MANY FORMS

Demonstrating thought leadership is not just about writing books or making TV appearances. Rather, it can take many forms and an advisor is free to determine the format that best showcases his or her expertise and insights while resonating with the target audiences.

Top earning advisors cite many of the unique ways they are burnishing their reputations as leaders and experts:

• Advanced licenses and professional designations

• Public speaking and appearances

• Traditional publishing as well as blogging and vlogging

• Educational workshops and seminars

• Pro bono work

For most, the topics central to their platforms are related to personal finance and investments with a few forays into associated topics such as insurance, estate planning and tax mitigation.

IT’S NOT A REPLACEMENT FOR SALES

While a strong presence as a thought leader can certainly help bolster business development efforts, it should not be confused with or substituted for a dedicated sales effort. The sales function is oriented around acquiring new relationships, increasing existing relationships and providing specific products and services with an eye toward generating revenue. And while strategic thought leadership can be designed to support those same goals, in its purest form it should focus on educating and sharing informed opinions in a way that enhances the overall brand of the advisory firm and the individual practitioners. For greatest effect, thought leadership initiatives should be treated as a separate discipline that is implemented in tandem with sales.

WHO’S YOUR AUDIENCE?

The majority of financial advisors think about thought leadership activities as a way to reach potential clients and accordingly develop their content to appeal directly to individuals or families. While there is plenty of evidence that this can work, there are also a few reasons why it’s not the most efficient use of resources. First, there are already lots of other people doing it. Second, it’s tantamount to communicating with prospective clients one-at-a- time. Third, it’s a very narrow interpretation that leaves a significant influential market unaddressed.

By contrast, top earning advisors acquire virtually all of their new business through influencers—professionals like attorneys and accountants—and leverage the vast business networks of those influencers to create a powerful one-to-many dynamic. As such, it can be considerably more valuable to craft thought leadership strategies to specifically target referral sources and position the advisor as a leader and expert in his or her respective field.

On the whole, top earners agree that channeling resources to thought leadership initiatives has contributed to their overall success and helped distinguish themselves and their practices.

Though thought leadership is just one of several strategic imperatives for leading advisors, the fact that top earners are disproportionately focused on it helps highlight the type of practice management activities that can contribute to overall success.

This article originally appeared in Investment News.


IMPORTANT INFORMATION / DISCLAIMER

This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security offered by iCapital. Past performance is not indicative of future results. Alternative investments such as those described are complex, speculative investment vehicles and are not suitable for all investors. An investment in an alternative investment entails a high degree of risk and no assurance can be given that any alternative investment fund’s investment objectives will be achieved or that investors will receive a return of their capital. The information contained herein is subject to change and is also incomplete. This industry information and its importance is an opinion only and should not be relied upon as the only important information available. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Securities may be offered through iCapital Securities, LLC, a registered broker dealer, member of FINRA and SIPC and subsidiary of Institutional Capital Network, Inc. All rights reserved.