Print this Article
Facebook   Twitter   LinkedIn   YouTube

How to set your marketing budget

By Pamela Gakii Riungu

I have noticed that my financial advisor clients typically spend about 1%–2% of their revenues on marketing. Digging deeper, I discovered that the marketing expenses usually include website development and management, events, and customer relationship management (CRM) software. Because the CRM is really an operational expense, I believe these advisors are not maximizing their marketing budget to grow their firms.

Why you need a marketing budget

Think of your marketing budget as an investment that should be designed to produce the highest return on investment.

Budgeting for marketing helps prevent future marketing programs from fading away before they have a chance to succeed. Marketing campaigns that lack a budget suffer from a lack of commitment and insufficient reach. If this discourages your marketing staff and leads to high turnover, that makes the problem even worse.

Components of a marketing budget

Once a company identifies its target clients and where they frequently congregate (whether online or off), the next step is to create a complementary marketing plan and budget. The marketing plan should align the company’s marketing goals with its business goals. The budget goes toward executing the plan with investments in personalization, marketing automation technology, and relationship marketing activities.

Personalization refers to creating content that focuses on the target client, clearly stating what solutions the firm provides for the client’s problems.

Technology helps to automate the workflow. In the marketing world, this can be an email marketing tool, social media scheduler, or a tool to manage content, websites, landing pages, or paid advertisements.

Relationship marketing activities include the firm strategically socializing with prospects, existing clients, and referral partners at social events (when clients are comfortable socializing in person again). For your current clients, funds should be allocated to recognize their birthdays, anniversaries, and other special days. Spending on the fundraisers and charitable events that interest your clients is another effective strategy. Better still if you can volunteer with those organizations. To get the most out of this strategy, survey your clients to discover how they would like to be recognized.

Recommended spending levels

Here are a few recommendations for what a financial advisory firm should spend on growth:

  • New businesses (one to five years old) should allocate 12%–20% of revenue toward marketing.
  • Businesses more than five years old focusing on growth should allocate 6%–12% of revenue.

You’ll notice that these percentages are much higher than what my clients spend. This suggests that many financial advisory firms are underspending, so they are not maximizing their growth.

Example of appropriate spending

Let’s consider an example of a firm that spends appropriately to grow its business. In this case, a financial advisory firm making $300,000 in revenue would allocate 10% to marketing, or $30,000. Here’s a breakdown of how a marketing team could effectively use that money:

Marketing Amount
Content creation $6,000–$10,000
Marketing automation $3,500–$6,000
Relationship activities $12,000–$14,000

Thinking again about that budget, keep in mind that your firm’s financial situation and its goals will evolve. For example, hopefully, your revenue will increase each year. So having a marketing plan and budget that you review at least twice a year or yearly will help you attract and convert prospects while re-engaging your existing clients and turning them into regular sources of referrals.

Pamela Gakii Riungu is an offsite chief marketing officer and the founder of PGR Marketing, which helps companies become profitable by connecting their products/services to the right target client. Contact her at

image credit: