Unlocking Growth: Expanding Service Offerings for Financial Advisors

Many financial advisors look to increase their revenue by expanding service offerings. Not only does this strategy attract new clients, but it also provides additional value to current ones. Understanding how to create new, in-demand services is crucial for advisors seeking growth.

Benefits of Service Expansion for Advisors

While familiarity in your current service niche is comfortable, diversifying your offerings can bring numerous advantages, including:

• Attracting new customers who were previously out of reach.
• Engaging younger clients who are beginning to seek advisory services.
• Addressing financial planning gaps for existing clients and enhancing retention.
• Achieving sustainable revenue growth at a manageable scale.

However, expanding services does come with risks. The most notable threat is the possibility of misjudging market demand and releasing a service that lacks appeal.

Steps to Create a New Service Offering

Launching a new service necessitates thorough research and thoughtful planning. Consider the following steps to develop an effective strategy.

Ask Insightful Questions

Gathering information can help you determine the potential success of your new offering. Consider these questions:

• What unmet needs do your clients currently have? Consider implementing an anonymous survey to gather insights.
• How does this new service integrate with your existing business model? Can it enhance your current offerings?
• What does market research indicate about the demand for your proposed services? Is this demand likely to grow or shrink?
• Do you have the necessary skills or qualifications to launch this service now? Will further training be needed?
• What financial resources are required to introduce this offering?
• Could strategic partnerships enhance your service development? If so, who might you collaborate with?
• What is your motivation for expanding services, and what potential challenges could arise?

Pondering these questions will clarify whether pursuing a new offering is prudent.

Highlight the Value

When developing a new service, you must consider its value to clients. Will they see the benefits? Present your offering in a way that illustrates clear, tangible value to potential clients.

Imagine hearing about your offering for the first time. Would it engage your interest? Would it alleviate a problem or fulfill a need? If you struggle to affirm these points for yourself, your clients likely will as well.

Set Achievable Goals

Establishing clear objectives is essential in guiding your advisory practice’s growth. Define what success looks like. Instead of simply aiming to boost revenue, consider setting a specific target, such as increasing revenue by 10% annually through this new service.

These goals will facilitate the tracking of progress through measurable metrics, such as new client acquisitions or improvements in revenue per client.

Testing and Adjusting

When introducing a new offering, expect a period of trial and error. Monitoring your key performance indicators (KPIs) will illuminate successes and areas needing refinement.

If a new service struggles to gain traction, reassess its relevance to your current business landscape. Sometimes, revisiting the idea at a later time may be the right choice.

Soliciting client feedback can provide valuable perspectives that may uncover unrecognized issues.

FAQs

What is the Best Way to Grow an Advisory Business?

Diverse growth strategies exist for advisors, including expanding service offerings, targeting different client segments, or forming alliances. The foundation for any growth lies in building strong relationships and delivering consistent value to clients.

When Is It Ideal for Advisors to Create a New Offering?

Recognizing a client need that aligns with your expertise and market demand is a key indicator for developing a new service. Market research can help highlight trends and client desires that are currently unmet.

What are the Risks of Expanding Service Offerings?

The primary risk lies in devoting time and resources to a service with inadequate demand. Ensuring solid groundwork through thorough understanding of client needs can mitigate this risk.

Conclusion

Effective service development hinges on careful planning and research. If you’re uncertain where to begin, consider enlisting the help of a business development consultant to evaluate your idea and create a structured plan.

Advice for Expanding Your Advisory Practice

• Once your new service is ready for launch, marketing is crucial for visibility. Utilizing a marketing platform can enhance your outreach. SmartAsset AMP (Advisor Marketing Platform) offers comprehensive marketing solutions tailored for client lead generation and automation.
• Prepare to handle objections when marketing a new service. Anticipating challenges and strategizing responses will bolster your confidence in promoting your offering.

Photo credit: ©iStock.com/Moon Safari, ©iStock.com/Natee Meepian, ©iStock.com/VioletaStoimenova

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.