Ten Rainmaking Ways to Build Your Fund Asset Base

By Frank Serebrin, Serebrin Consulting Group

How do small, start-up, and mid-sized mutual fund and alternative investment firms grow in turbulent times? Start with a unique story, know your strengths, acquire sales agreements, go national. Then what? Consider these ten approaches:

1. Sell to your existing advisor client base. This is the low hanging fruit. These clients know you, trust you, like you. Create a client advisory board, listen to their suggestions, make them your most willing advocates. While you are at it, ask for more business.

2. Acquire referrals from your existing client base. “How likely is it that you would recommend our fund to a friend or colleague?” This simple question is a key to finding your promoters. Nearly half of advisor’s new clients come from referrals. Yet only one in ten ask.

3. Ask for referrals from your professional partners. Ten percent of new client business is generated by referrals from CPAs and attorneys. Can you grow this?

4. Hire a full-time wholesaler. The most productive wholesalers have advisor contacts, and will tell your firm’s story with ease. The revenue they bring in, though, may not equal their compensation. The least experienced will merely drain your capital.

5. Sub-contract a wholesaler firm. A lower-cost alternative to a traditional wholesaling, you only pay when they bring in sales, and you may gain nationwide exposure. Cons: these wholesalers have divided loyalty – they may represent four or five other firms.

6. Sponsor industry conferences. The FPA, NAPFA, Schwab, Morningstar, TDAmeritrade and others sponsor national and regional conferences where 200 to 2,000 of your best advisor prospects go for new ideas. Better: speak at the conference.

7. Create permission-based marketing campaigns. Cold calls are intrusive, unproductive. Permission-based email initiatives targeted to prospective advisor clients can turn strangers into clients. Inform, educate, advocate in a series of communications.

8. Develop sales-driven marketing materials. Define your firm beyond performance by what you offer your clients to help them grow their business. Advisors cite the need for referrals, practice management tips, and value-added programs as critical to growth.

9. Start a public relations program. An effective PR effort can bring in new revenue and maximize client retention. To be in demand, have a unique story and educate the press and public. An uncommonly strong track record is a pre-requisite.

10. Add a new product. A product line extension provides a compelling reason to contact your clients who want more of the same, with a lime twist. Or private label as a sub-advisor.