What would a financial advisor truly pay for a quality lead?

[chartwiz66]

I have a question for everyone here - if there was a company out there that focused primarily on qualifying high value clients that were looking to sit down with an advisor - what would an advisor be willing to pay for such leads/referrals?  For example - let's say this potential client expressed a) a need for life insurance for his family, b) a need to roll over significant assets, and c) wanted to receive a call from an advisor to immediately schedule a consultation.

My guess is that there are advisors out there that would be willing to pay $300-$500 for such a lead - is this realistic?  What about a percentage of first year GDC along with that?  Maybe $300/lead that would be taken out of 1st year GDC?

The reason I am asking is that I am interested in building a boutique firm in a high net worth area that markets events that provide local advisors 20-30 quality leads a day.  This firm would seek 5-8 advisors looking to grow their business with good quality financial planning leads.  These are not names gathered over the web or taken from lists - each one I have met personally, and quantified their needs ahead of time.  Quality of the leads would vary from say, a college graduate that just started their career and has minimal needs vs. a high net worth client that has many planning needs, insurance needs, estate needs, etc.  Almost like an "outsourced" marketing department.

I posted something similar to this a while back and ppl. responded with "If you were able to do that, why wouldn't you just keep the great leads and start your own firm?".  I am a marketing major, have my CFP, and have 5 years advisor expereience.  My forte was always marketing, obtaining leads, and scheduling initial appointments.  That is why my venture would concentrate on only that.  I would market, find and qualify clients, and provide the leads to a select group of advisors.

I have been at companies where advisors pay close to this much for someone who punched a few keys in the company website and requested a brochure.  What about a high quality, warm lead, from someone requesting a consultation for their family?

Any and all responses would be appreciated!

 

[MrC1]

Instead of starting your own firm, why not join just one firm that you respect and get more than a bird-dog fee.  You could get more than ongoing %, but also equity and support for your marketing efforts.

Where are you located?

[Amber]

The position you describe is called a "rain maker."   Many firms have an individual who brings in the clients while others handle the planning and investments.

Sharing GDC is an issue with many B/D's.  If you are not an advisor with them, they will not allow a split.  (Due to E&O liability concerns.)

 

What are those leads worth?  If you actually hand over a big acct to an advisor who then makes a fee or commission on it, the value could be huge.  How you make it work is a whole other question.

P.S.   Interesting to see that nothing has changed on the site in months and no one (hosts) are commenting on it either.

Amber

[Vig Oren]

 

IMO, if you're (or eager to be) an "elite" advisor you should NOT go after payolas.  But there are others who think otherwise.

 

Check this:

 

Time to Say Goodbye

Elite Advisor

By John J Bowen Jr

September 1, 2008

Link: 

http://www.financial-planning.com/asset/article/651521/time-say-goodbye.html?pg= 

John J. Bowen Jr. is founder and CEO of CEG Worldwide, a global training, research and consulting firm dedicated to helping advisors and the institutions that serve them become more successful.

Excerpts: 

"Option 4: Sell the inappropriate clients. This final option is the best solution. By selling all of your non-ideal clients to an outside advisor, you will have complete closure and the opportunity to turn your full attention to your remaining profitable clients and prospects.

If you're an independent advisor, it should be relatively easy for you to package up a portion of your client base and sell it to another independent advisor. If you're an employee, your advisory firm should have the flexibility to sell a portion of your client base internally. Effectively, you would be selling a portion of your book of business and should receive either ongoing revenue or possibly upfront money. 

And: 

Consider setting up a conference call with the principal advisor to whom you are selling or transferring the clients. This will be your best opportunity to introduce the new advisor, who can then address any questions or concerns the clients may still have about the arrangement. In addition, take the following steps to help ensure that the transfer transaction goes smoothly: 

·                                 Keep all parties interested. Regardless of whether you're an independent advisor or an employee, it's important to ensure that there will be an earn-out provision based on the degree of success in transferring or selling the revenue opportunities. It is in both parties' interest to facilitate a smooth transaction."

[chartwiz66]

Hi guys,

Thanks for responding - I am located in the Phoenix, AZ area for the poster that asked...

I appreciated all of the answers, thanks to those who have responded.  Ultimately becoming a financial advisor again might be something in my future - but based on my past experience it was always much easier to locate clients, gather leads, and set initial appointments.  For me, meeting with clients, putting together plans, etc. just seemed to bog down the process of finding more clients!

My thoughts were - finding let's say 20 leads per day and selling them for $200-$300 = approx. $4000-$5000/day X say 300 days = 120K to $150K for 1-2 hours work a day.  I also have a great "in" with an establishment that will allow me the ability to make these numbers quite easily.  The key is in the ability to GET 20-30/day to advisors that would come to know my quality and how potential clients are selected.

 

[Tad Borek]

Question to other practitioners: do you actually buy leads for this type of client and get business out of it? I just can't see it.

Question to OP: according to the 06 Census estimates all of Maricopa County had about 105,000 households with incomes over $150k. What's the plan for squeezing 20-30 "quality" leads per day out of that relatively small market? Keeping in mind that Ken "Junk Mail King" Fisher has been bombarding them with drip mailings every two weeks for the past five years...and of course a lot of them already have advisers.

 

-Tad

[Rocket, CFP(R)]

"My thoughts were - finding let's say 20 leads per day and selling them for $200-$300 = approx. $4000-$5000/day X say 300 days = 120K to $150K"    

Correction ------  $4000 X 300 days = $1.2M not $120K       

[anonymous]

Chartwiz, I'd pay 50% on all business including renewals.   This is much more valuable than the $300.  The problem is that you can't deliver what you are promising, but if you could...

[Mr.6]

Good idea, I set appoinments for brokers and agents and advisors all over the country, from information they had sent out, and seminars they had had, this works and works well for you and the advisors, I have also set up CRM teams for this. Advisors need help, they have no time to market with conditions as they are they need us. You must stay in compliance at all times.

I also have my 65 and all my insurance licenses, so the qualifications of the lead is so more stronger in respect to the cleints interests at hand and how the advisors can meet those. All they have to do is do do the cleints assesments and write the business as needed, that is what I provide to them.

Let me know, maybe we can partner on some ideas. I am located in South FL. in the Palm Beach Boca Raton area and only work with with high net clients.

Paul C. Kopp 954-821-8404

pcknsb@hotmail.com  any Advisor that wishes to contact me, in respect to what I do. Have at it!

 

 

[Mark]

I find your post very interesting.  Please either email me at mherhold@comcast.net or call my office at 800-645-3035 to go over some options.

 

[volstrike3]

You had the best response of the bunch.  I own an insurance agency but am looking into offering FP services which is why I am here.  I consider any marketing effort that has a first year ROI of greater than 1-1 to be a success.   I figure if I could buy a respectable insurance agency for 1X revenue I would do it every day of the week because the going rate is double that.   The OP's offer sounds great but I just don't see how it is possible.   I have used too many lead generation services to still believe in the tooth fairy.  In my experience, HNW clients are not usually begging to find a qualified insurance agent or financial advisor... it is the other way around.  Appointment setters work but they are not a magic bullet... I spend $6k a month on telemarketing and usually break even on the first year.  If the OP could really bring in 20-30 qualified HNW prospects a week... he could set up a strong back office and make it rain like Pac man Jones at a vegas strip club:)

[PL949]

Hello Chartwiz66.

Can you please contact me with more details about your services?

I look forward to hearing from you.

Thanks,

PL949

[jmitchell3]

i'm an advisor in phx.  i'd be interested in speaking with you a bit more about what you are trying to accomplish.  Feel free to drop a line--jmitchell.rhc@gmail.com.

Jeremy

[jenster]

Im interested to see what your strategy is and if it is promising, I think an advisor would be willing to sit down and talk to meet quality leads.


e-mail me if you get a chance powerpuffjenster@yahoo.com