My guest today is Amy Gordona CMO of Kestra Financial. Amy had an incredible career in more traditional financial services before moving to Kestra. Kestra is a unique company which provides a platform for independent financial services professionals. This is part 2 covering the Kestra business.
This is the free edition of Marketing BS. Subscribers were sent Part 1 yesterday, as well as this week’s essay (on early vs late funnel metrics and the link between COVID tracking and marketing). You can subscribe here:
Transcript
Edward: This is part two of my interview with Amy Gordona. Today, we're going to explore her experience as CMO of Kestra Financial. Amy, can you start by explaining what Kestra Financial is?
Amy: Kestra Financial is a wealth management platform that supports independent financial advisors. We’re sometimes more traditionally known as a broker dealer. An independent financial advisor is an entrepreneur who runs their own wealth management or financial planning business. We supply the backbone for an independent financial advisor. We supply the technology that they use, we supply the investment product selection that they give to their clients, and we provide the compliant support that they need in order to operate their business.
Edward: The type of business Kestra is, has it been around for 100 years? Has there been financial advisors who have used platforms like this?
Amy: You can probably think about Merrill Lynch, think about companies like UBS. All of them have operated broker dealers from back in the time. If you think about the term, you needed a broker in order to transact your business. That broker usually sat at a firm like Merrill Lynch or UBS and they used a trading platform to transact your business. That's how that business got started.
Edward: How is Kestra different from Merrill Lynch or UBS?
Amy: Specifically, Kestra Financial caters to the independent financial advisor, meaning we support entrepreneurs. A company like Merrill Lynch or UBS, their advisors work under their brand.
At Kestra Financial, we support the independent financial advisors’ own brand. You, Ed, would have your own brand. You would have your own shingle outside your brick and mortar location. The clients are yours. They are not Kestra Financials’. They're your clients. We merely provide the support that you need—the services, resources, and support that you need to serve your clients well.
That's how we're different. We don't dictate how financial advisors do their business, how they facilitate their business with their clients. We merely support their right of choice, their right for choice in serving their clients.
Edward: The difference would be if I'm a restaurant owner, I could go and start my own restaurant. Then, presumably use some sort of tool to help me do that restaurant. Or, I go to McDonald's and say, hey, give me the whole kit caboodle. In both cases, I'm running my own restaurant. One is a franchisee and one is an independent operator. You guys are servicing the individual operators rather than the franchisees.
Amy: That's exactly right. We support and advocate for what they need in order to make them more successful. We're a B2B business, we're not a B2C business.
Edward: The people who come to you, what were they doing before? If I was a financial advisor and wanted to do my own shop, was that even an option before? How would I do that?
Amy: An independent financial advisor has to affiliate with a broker dealer. We don't like to refer to ourselves as a broker-dealer because we don't just supply broker-dealer services. Like I stated previously, we supply technology, we supply practice management, thought leadership, and compliance oversight. We are full service for a financial advisor.
If a financial advisor didn't want to affiliate with a broker-dealer, they wanted to take on all of those services, and all of that compliance compliance risk themselves, they would have to operate their own independent RIA or they would be a captive financial advisor like they are for Merrill Lynch or UBS.
Edward: Got it. You sit in between the two options of like, hey, do it all yourself or go to UBS and use someone else's brand. You let them have their own brand without having to do all the heavy lifting of doing their own brand. In email marketing, you're like the substack, or I can have my own brand but they run the platform for me.
Amy: That's exactly right. I think one of the things that separates an independent financial advisor from someone who wants to operate within Merrill Lynch, UBS, or go on at their own is exactly that. They want to take some of the risk off the table, they want to take some of the business management off the table, but they still want to be able to make their own choices and run their own business. It's exactly that.
It's a happy medium with all the support you need, but not without all of the risk. Everyone knows that financial services is a highly regulated industry and it should be. End investors deserve to have oversight over how people are managing their money. Kestra Financial provides those umbrella services that help protect end investors, but also help financial advisors be able to have all of the resources they need to provide solid financial planning services to their clients.
Edward: Kestra is actually a holding company for four different brands, is that right?
Amy: Kestra Holdings is a holding company for four different independent brands. Kestra Financial is one of those brands, that's the company I was originally hired to support. H. Beck is the second brand that we own and they are also a broker-dealer. Arden Trust is a personal trust company that we acquired. Then, the fourth company is Bluespring Wealth. That is an arm of the company that we launched about a year and a half ago. That arm of the company focuses on acquiring independent wealth management businesses in the industry.
Edward: Kestra, see if we get all these straight, is a kind of business we've been talking about back. H. Beck is the same thing with a different moniker.
Amy: Yeah, it's the same business. It's also a broker-dealer, but Kestra Financial and H. Beck have a slightly different target market, so to speak. Both independent financial advisors, but a little bit of a different segment of the industry. They are differentiated in that way.
Edward: They're differentiated from a marketing perspective, not a product perspective.
Amy: Correct. They're differentiated from a marketing perspective. Absolutely.
Edward: Then, Arden Trust, that's a completely different business.
Amy: Completely different business. They market personal trust products to independent financial advisors and to financial advisors. Financial advisers along the spectrum of wealth planning for their clients come across estate planning needs. Part of those estate planning needs are needing personal trusts. Arden Trust provides the vehicle for those trusts that financial advisers use for their clients.
Edward: Is that a vertical integration play? Is that the idea that, hey, now you already have these relationships, you might as well sell them more stuff and so you get the stuff to sell them?
Amy: We like to view it as an ecosystem in the sense that, yes, if you have an independent financial advisor and as we just spoke about a few minutes ago, they need resources in order to have a wealth of options for their clients and their clients’ needs. Part of those options are estate planning needs. When they come across the need for trust services, it's a better position to be in, as we feel, to have those services available to our advisors as part of the ecosystem.
Edward: Then, Bluespring Wealth is you basically owning the financial advising. Is Bluespring Wealth just effectively a client of Kestra? Like, your own biggest client?
Amy: Actually, no. However, that segment of our business arose out of a need in the industry. Anyone who starts to look at the trends in the financial services industry will start to see that many of these financial advisors who built their businesses over the last 20 years are baby boomers. They are now entering their 60s. Some of them are older, some of them a little younger. There's a gap in the industry. That gap in the industry is called succession.
Many of these folks that have built their businesses don't necessarily have a child that's going to take over their business, they don't have a younger partner, or a younger advisor who has the capital to buy their business from them. The valuations of these businesses are strong right now. These entrepreneurs have built successful businesses and with a solid client base who they have very close relationships with.
The succession options for these entrepreneurs are limited and they need help. What's that saying? The cobbler that doesn't know how to fix issues or has worn shoes? A lot of these entrepreneurs just have not worked on their business in terms of succession planning.
Bluespring Wealth is a succession plan option. We have the capital to buy these businesses, but continue to foster the relationship, keep the entrepreneur, the principal, or the owner in place so that they can continue to have the relationship with their clients, and we can continue to grow their business—help them grow their businesses.
Edward: Is that how it all fits together? Is it all just different pieces that all drive that core business? Each piece is profitable on its own, but it becomes more profitable when they integrate?
Amy: You've nailed it. That's exactly right.
Edward: It all comes down to initially acquiring agents or acquiring customers’ forecast financial. Is that the key entry point?
Amy: That's the key entry point. I think what makes our B2B marketing unique is that while you are selling pieces of a widget, so to speak, we have a technology stack and that technology stack is innovative. It is a valuable part of what the financial advisor needs.
Again, we have a wealth management platform and we offer a choice of investment products that is valuable to the financial advisor. We have compliance oversight and very business friendly compliance that's very valuable to a financial advisor. We really are selling ourselves in so much of this sales process. If you are going to rely on a company to help be the backbone of your business, it's not just about the technology and the widgets within the company. It's about who is serving you. It's about the people that you interact with and it's about the culture that it helps create for you in running your business.
A lot of what we're selling is the firm itself, the people, as well as the resources. That's not easy all the time. I don't know how much your audience knows about this side of the financial services business, but for an independent financial adviser to move their business to a new company is a lot of work. It's not easy. It takes a lot of different pieces of paperwork and a lot of time with their clients explaining why they're moving and why the better resources that are in Kestra Financial are better for their business.
In order to convince someone to go through that, what I like to call pain to get to a better place, it can be a very long sales cycle. It can be very much selling yourselves, ourselves as much as it is selling the pieces of resources that we offer.
Edward: Who are you selling to? Are you selling to the advisor who's at UBS looking to put up his own shingle? Or has their own shingle already and wants to get rid of all the back office work that they don't want to be doing anymore?
Amy: Both. We absolutely sell to both. We absolutely support both models. If you don't have your own shingle, you're a part of a wire house firm, you want to own your own shingle, and you want help doing that, we provide the support to do that, including the real estate. We handle that entire transition for you, get you all set up, and ready to go.
If you already have your own shingle, that is our main support lever that we have.
Edward: You're saying that the larger market is people that are already on their own shingle and they want to take off a lot of that effort.
Amy: Correct.
Edward: It’s easier to convince somebody to do what they’re doing now, only make it easier than it is to convince them to do something new.
Amy: Right. For us, it's all about upgrading the resources that they have. So many financial advisors that have their own shingle have been with a firm for a long time. Now, the technology that's supporting them is out of date or what they want to do to build their business just isn't an option because the firm they're with doesn't have the support that they need. Kestra Financial is an upgrade for them in terms of the resources that are going to support them.
Edward: Are they out looking for a better solution or do you have to go to them and explain that, hey, there's a better solution out there?
Amy: I think it goes both ways. I think there are some that absolutely have reached their breaking point on a specific pain point. That pain point can be technology, it can be the compliance support they're receiving, it can be the investment choice of products that they have, it can be the client, or the customer service levels that they receive when they need help from someone at the firm.
Usually, there is a specific pain point that drives the financial advisor to want to look at new firms that can provide relief to that pain. That is the best situation to be in. If you can identify that pain point, then we can really move down the sales cycle into the sales cycle faster.
It also works where an advisor almost doesn't know that they have pain until we show them that there's something better. Once we show them that there's something better, we can then start to demonstrate that you had pain you didn't even know and we can relieve it.
Edward: Those first types, the people that identify their own pain, I assume you're collecting them on Google paid search and organic search. They're going to type in, like, solve my problem. You appear to have the results at the right time, correct?
Amy: Yup. We're deploying a persona-based, what I just referred to, pain point-based awareness tactics and also our organic search, our paid search, all figures around those pain points, looking for better technology, who's the number one broker-dealer, be a part of a culture that helps your business grow. We try to build personas around those pain points and then build tactics to support content that demonstrates how we can relieve that pain point.
Edward: Rather than someone searching for backend support, they're looking for specific issues like, I need a new bookkeeper or I need a new timekeeping manager. You basically target those individual pain points and say, hey, not only do we solve that problem. We can come in, take over everything for you, and take away all your pain points.
Amy: Correct. I'll give an example of a consideration, some consideration as we ran with testimonials about those pain points. If compliance is a pain point for you, we ran testimonial ads where some of our existing advisors are talking about the support that we give. When it comes to technology, same thing. We've run ads and tied those ads to pieces of content, tied those ads to search topics, to search terms, all having to do with how we are better at that particular pain point.
Edward: Obviously, Google, but are you running them on financial services publications that these people read?
Amy: Exactly. Trade publications and financial services are very heavily read by all financial advisors. wealthmanagement.com, financial-advisor.com, investmentnews.com, they have huge followings that they've built up over years of being very respected and trusted sources of new rules and regulation, best practice management—all types of resources and topics. Those trusted resources are where financial advisors go to read their news of the day. Using those trade publications and investing some of our marketing dollars in those trade publications is almost imperative.
Edward: Are they effective display ads, or are you getting advertorial? How are you getting people to actually see and read these ads when they're going and reading their daily media?
Amy: Both display, newsletters, paid content, and promoted content that's in both on their sites and in their newsletters. Doing podcasts, having members of our team do podcasts with some of their editorial staff, engaging in bylines and contributing pieces of thought leadership to those trade publications are all part of the things that we do to partner.
Edward: How do you get their attention, though? How do you get them to interrupt them? Like, if I'm looking at Facebook, I get interrupted right in my news feed. That ad unit on Facebook is really, really effective. The targeting is one thing, but the ad unit is so effective. Are there equivalent ad units when you're in these financial publication services that can get someone's attention, they don't just drift over?
Amy: There are. What I have found, there are ad units that can get your attention. You can buy pop-up models that don't go away until you x out of them. You can buy a run of the page where you're basically surrounding the entire page, where you're sponsoring something.
What I have found though, too, is when you're running your own business, you're really interested in ways that you can grow your top line. You're really interested in ways that you can be more effective quicker, and make more money. An entrepreneur wants to make more money. What I found to be secondarily just as effective is having the right content.
Yes, you can run ad units that are attention grabbing, have the whole page that then an adviser can't miss. You can have the right page search terms. When you start to offer an advisor real valuable content about how to effectively make them more money, be better at what they do, serve their clients better, I find that our engagement has been strong. With trade publications, you have a lot of opportunity to offer that content, whether it's part of their paid promotion or it's part of conversations that you would have like we're having today, that's where the trust is built with the financial advisor and where the proof is in the pudding, so to speak.
Edward: I've often argued that product companies are becoming more and more like media companies because that's how you get the attention. You need to have the person pay attention to the content. The way to do that is to create good content. You can only hack the subject line so many times before someone starts ignoring you if you don't have good content behind it.
How long until you guys start a fifth company that's actually creating content for financial advisors?
Amy: I just had a conversation with a colleague where I said we missed it. We could have been billionaires. All we had to do was figure out how to start a company that creates a turnkey content and lead gen engine for financial independent financial advisors. I'm talking B2C, helping financial advisors find more clients and get engaged with more clients. I think I could have retired already to Bora Bora.
Independent financial advisors, again, going back to their profile, they built their business brick by brick. These are people that worked hard, like shaking hands, going to little league games, and getting involved in the community. These are people that care about their community, but they're not necessarily marketing geniuses in terms of how to evolve with the times, become more digital, get their website looking spiffy.
Actually, that's part of the services Kestra offers—helping them with those marketing tactics. However, if I could have figured out how to start that one company that put a turnkey package together to help every financial advisor do that, I might be doing the podcast that you’re doing today.
Edward: Amy, thank you so much for being on the show. Before you go, tell me about your quakebook and how it changed the way you think about the world.
Amy: My quakebook was a book called Dopesick. Have you ever heard of it?
Edward: I have not.
Amy: Dopesick is actually the story of how OxyContin became such a problem in the United States. It looks at the corporate greed that drove painkiller production to the place where it is today and the devastation that it's had on many Americans.
I'm a fairly optimistic glass half full—believing in the good of people type of person. The facts that are laid out about the purposefulness that Big Pharma specifically went, the plans that they dropped to specifically drive pain medication into parts of the country where they knew people were working hard jobs, suffering economically, and suffering health wise was borderline sociopathic.
I always knew there was an element of that in big businesses. By the way, I still believe that there are lots of great big businesses out there and lots of great people who do great things. The cost, the way that the scales tipped in this particular case where money and profits became more important than anything else, it really made me think twice.
It's part of the reason why I like working for a company where it's a smaller company in the grand scheme of things and where I feel that I have an impact because that book did it. It shook me in terms of where things can get out of control, how people will just go along with something, how so many people went along with this plan knowing it was damaging human lives, and the destruction that it did to too many people. So many lives have been lost over pure greed, pure business greed.
Edward: I think there's something really nice about working for a company that you feel proud of and you think is doing a good in the world. I think it'd be very hard to work for a company that you don't believe in, too.
Amy: That is a lot of driving force that keeps me excited today. At the end of the day, people like my parents need financial help. They need financial planning. I grew up in a middle class household. My father worked hard every day in a blue collar job. He worked his butt off but needed help in order to be able to retire. People that we support provide that help to people like my parents. I'm really proud of that.
Edward: Thank you. This has been fantastic. I really appreciate your time today.
Amy Gordona, CMO Kestra Financial, Part 2