Edelman Financial Services plucks “What’s in your wallet” CMO

Ric-on-TAM-3-setSteve’s breakdown: Ric Edelman just hired former what’s-in-your-wallet Capital One CMO to replace former Verizon can-you-hear-me-now? guy. Will there be more changes? Absolutely! My spider senses says to pitch spots with Ric in them . . .

FAIRFAX, VA: Five months after parting ways with his former chief marketing officer, Ric Edelman has appointed a new CMO in order to goose growth at his $16-billion RIA.

But it remains to be seen whether James Mendelsohn’s hire will translate into a new marketing initiative for a firm that’s used seminars and the pan-media presence of its key man to recruit some 30,000 clients, but which is now in need of a jumpstart.

Mendelsohn comes to Fairfax, Va.-based Edelman Financial Services LLC after stints with CAN Capital Inc., McKinsey & Co. and Capital One, where he helped craft the famous “What’s in your wallet?” ad campaign. He has extensive experience in digital marketing, one channel that has remained relatively untapped at EFS. See: One woman’s journey from Whole Foods to Edelman Financial.

“I am impressed by Edelman’s ability to bring someone in who held a leadership role at Capital One, which has had a very successful digital strategy,” says Marion Asnes, CEO of The Idea Refinery LLC and the former chief marketing officer at Envestnet. See: As Fidelity divorces American Express, Schwab steps in to launch AmEx cards — with help from RIAs — as part of broader effort.

“Edelman is a forward-thinking businessperson and I’m curious to see what he and James Mendelsohn will do together.”

Too 2013?

Mendelsohn replaces former CMO Marvin Davis, who left the company in December. Davis joined Edelman in 2013 after four years as CMO of Tempe, Ariz.-based LifeLock, the identity protection firm. Previously, Davis was marketing head at Comcast Cable. In the early 2000s, Davis served as a vice-president of brand management and advertising at Verizon where — like Mendelsohn at Capital One — he helped develop a successful nationwide advertising campaign, in Davis’s case the one with the catch-phrase “Can you hear me now?”

During his tenure at EFS, Davis helped build out the firm’s “Finish Rich” seminars (conducted by Edelman with fellow financial services impresario David Bach during a fairly short-lived collaboration) See: Ric Edelman takes on an advisor-evangelist clone in David Bach — but says mitigating key-man risk is a very secondary purpose of the hire )

But Asnes questions whether seminars are the most effective choice for a technology-capable advisor with more than $10 billion in AUM, venture capital investors and extensive national media exposure. See: What Ric Edelman is like live on stage

“The market is moving and advisors who are prospecting baby boomers by asking them out for a steak are not keeping up. Even my dad, who’s nearly 90, gets his financial information online,” says Asnes.

Edelman says that seminars still pack plenty of punch.

“Seminars continue to be an important part of our financial education activities. Last year we did about 600 events and we anticipate that we may do more than 1,000 this year and even more in 2017. Also, the makeup of the audiences continues to reflect our target audience. We have built a strong reputation as financial educators and we expect to maintain this focus,” he writes in an email. See: How Ric Edelman manages to bring on 4,500 new clients each year by force of personality while diminishing key-man risk at the same time.

Mixed signals

Edelman Financial has enjoyed an annual growth rate of 20% for the last five years, according to Edelman. The firm had around $8 billion in assets when it was taken private by Lee Equity Partners in 2012 and currently has about $10 billion. See: The 19 ways private equity has juiced up the RIA business and how it’s working out.

Bankrolled by new private equity owners and coming off a stalled year in the market, EFS’s growth rate declined to about 7% in 2015, with the company adding roughly $1 billion in assets in a flat market. In October, Lee Equity Partners sold the firm to San Francisco-based private equity firm Hellman & Friedman. See: Why the PE that helped take LPL public now controls Edelman Financial and plans to invest more heavily

Now, capitalized anew, the firm wants to get back to that 20% growth in 2016 and beyond. Just don’t expect an overhaul. With fine semantic parsing, Edelman told a reporter that Mendelsohn’s hire doesn’t necessarily signal a new marketing strategy for the firm but added that the shake-up should lead to a different, more personalized outreach to clients and potential clients.

“James has substantial experience in the digital space and building national campaigns as well,” says Edelman, “He and I will be working very closely together on the firm’s financial education and consumer outreach.” See: The 25 financial advisors with the biggest online presences — and a frank analysis of what online omnipotence does (or not) for them.

Clients on tap

Mendelsohn, a native of Washington, D.C., returns to the area after three years in CAN Capital’s Atlanta office where he led the rebranding (it was formerly known as Capital Access Network) and launched the firm’s online marketing channel.

“The aspirations that Ric has for the franchise are really compelling to me,” says Mendelsohn. “The opportunity is all about how you reach more people. They’ve got a lot of potential energy that we just have to activate.” He will begin his new job in May.

Mendelsohn also expects to oversee more segmented, differentiated marketing strategies, for instance communicating with clients who are closer to retirement differently than those clients in the middle of their careers.

“What makes us unique is our focus on providing our advisors all the clients they want, and James will be key in that regard,” Edelman wrote in a prepared statement, referring to his company’s implacable ability to generate leads.

Tried-and-true markets

Ric Edelman: Seminars continue to be an important part of our financial education activities. Last year we did about 600 events and we anticipate that we may do more than 1,000 this year.Ric Edelman: Seminars continue to be an important part of our financial education activities. Last year we did about 600 events and we anticipate that we may do more than 1,000 this year.

Edelman adds that his firm’s new approach will be mindful of not stretching supply lines too far into marketing Siberia.

“Our focus this year is to emphasize expansion in markets where we already are rather than expand into new markets,” he says, adding that most of the 50 advisors the firm hopes to hire this year will be placed in existing markets. EFS currently has 42 national offices with more than half of them densely packed along the I-95 corridor between Virginia and Boston.

EFS’s greatest concentration is in the New York City, with seven offices, and in the suburbs of Washington D.C. and in Baltimore where EFS has eight locations. See: How Ric Edelman manages to bring on 4,500 new clients each year by force of personality while diminishing key-man risk at the same time

In October, Edelman told RIABiz that after a three-and-half-year-tenure, his private equity owners weren’t focused enough on helping his company grow.

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