Schwab is set to connect RIAs outside its referral network to HNW investors through its 'Got-milk'-style campaign

The “Got Milk” campaign is an interesting analogy. Having worked with these folks when they established their initial pool of capital (once the program went national in 1995), I am very familiar with the campaign. From an awareness perspective, the concept is great. From a practical perspective, the paths diverge. The milk processors originally agreed to contribute $0.03 for each gallon processed; a very democratic way of charging the larger processors more and the smaller processors less. All processors in the industry participated.

The current challenge is that our industry is not well thought of by the consumer. Instead of sending a unified message, the industry has chosen (repeatedly) not to work together to promote the awareness of top-shelf industry firms and what best practices resemble. As a result we remain fragmented.

Clearly Schwab will only profile firms on Schwab’s platform. What about the great advisory firm at Fidelity or TDA or any other platform provider? Is this about the consumer or Schwab? What will the standards be and how will they be verified? And, what will spending a few million per year do to combat the billions spent by the name brands?

The major beneficiaries of RIA growth (the custodians, asset managers, and the RIA themselves) have an opportunity to work together to create consumer awareness and exponentially multiply the voice that the industry has. Right now we have one player (Schwab) stepping up to talk about the industry and promote firms on their platform (only). Until the industry unites we are committed to being a cottage industry. Don’t get me wrong, the category is growing and lots of RIAs have very nice businesses that support their lifestyle; a minority of which operate as real businesses, independent of the founders. However, until the category operates as a unit, we are committed to being under-recognized and the consumer likely under-served.

Wow, there is a lot in this one article.

I have actually done consumer marketing, owned an ad agency and worked extensively in market research. Here are some thoughts.

The fact of the matter is that consumer, B2C, media may not work with what is essentially a B2B sales challenge. People investing substantial assets and their life saving are much more similar to people seeking a doctor, surgeon and other B2B services.

A simple truism is that people want to see a “mirror” in all communications. So investors want to see themselves mirrored back, RIAs want to see themselves mirrored in the ad/web and the marketing people want to see their corporate interests mirrored in the ads. It’s human nature.

So who is this campaign really speaking to and mirroring? Typically, the people paying for and making decisions on the ads want their interests “mirrored.” Even unconsciously they will make decision based on their personal interests – as does the ad agency, the media, etc.. That’s a very long food chain before it gets to the advisor or investor.

No doubt Schwab is hoping for immediate business benefits for it’s key business goals. It should boost their retail brand.

“RIA Stands for You” is an aspirational statement and awfully oblique. We are hard nosed marketers and “speaking for the industry” we would never let our clients do. Most of the impact of any advertising comes from the dollor amount or “spend.” The influence of the actual campaign is impossible to measure.

Let us also caution, and we have studied this for years, the evidence for any effectiveness in web advertising is weak — at best. TV is still the main outreach media. The web is cheap and promises a lot of numbers – but much more proof it drives behavior is needed. Nielsen has some decent studies on this. They are not encouraging.

The advisor industry needs to get some real data on all of this before spending a lot more money.