Many wealth managers, along with numerous other types of professional advisors, frequently toss around the term “thought leader.” They use the term in their brochures and PowerPoint presentations. They have the term as a tab on their websites. However, the reality is that most wealth managers are not thought leaders.
If, for example, you are the only one who says you are a thought leader, you probably are not one. While many professionals call themselves thought leaders, very often they are not actually seen as thought leaders, nor do they actually enjoy the rewards of being a thought leader. Most of them are using the phrase as a marketing gimmick and that is all it is.
On the other hand, when affluent individuals and centers of influence serving the affluent say a wealth manager is a thought leader, then he or she probably is a thought leader—and is likely accruing enormous business advantages. In study after study, verified thought leaders derive tremendous business advantages. Specifically, new and wealthier clients are the more pronounced business benefits of being a thought leader.
A good amount of confusion surrounds the definition of thought leadership. When it comes to business success in the wealth management industry, two parts incorporate the definition of what a true thought leader is. Part one is about how others perceive a thought leader: A thought leader is a wealth manager who is recognized by affluent clients, prospective clients, centers of influence and competitors as a leading financial authority. As a result, he or she is their go-to expert.
Part two is about the commercial component of thought leadership: A thought leader is a wealth manager who significantly profits from being recognized as the go-to expert.
Effective thought leadership campaigns result in new and wealthier clients and significantly more assets under management irrespective of market conditions, as well as significant opportunities to provide additional financial products and services—leaving little doubt about the true value in being a thought leader.
Across the range of professional advisors, there is widespread recognition of the benefits of thought leadership. In a survey of 1,452 professionals from wealth mangers to accountants and from lawyers to insurance agents, about four out of five (78.2 percent) said that they would like to be thought leaders. Among wealth managers, the proportion was even higher: 85 percent.
However, when it comes to whether these professionals actually are thought leaders, the results show otherwise. Fewer than one out of 20 (4.8 percent) overall can be classified as thought leaders. Just 4.5 percent of wealth managers can be classified as thought leaders.
In researching the wealth management industry, nearly all of the most accomplished wealth managers (those consistently earning $1 million or more annually) see the business development power of thought leadership, especially as it relates to increasing their assets under management.
Clearly, thought leadership works well—extremely well—in promoting the success of wealth managers. Moreover, most any wealth manager can be a thought leader.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.
