Business development is a major concern of financial advisors. In a study of 421 financial advisors conducted in 2023, nearly 80% said a key concern is finding “ideal” clients and 75% said increasing assets under management is a key concern (Exhibit 1).

While organic growth is critical to the success of financial advisors and their firms, most financial advisors are not bringing in many new clients. To successfully generate organic growth, two factors are essential. One is connecting with high-quality prospects. Client referrals and referrals from other professionals are the most effective way to connect with “ideal clients.” But getting such referrals is not enough.

Financial advisors still need to win the trust and confidence of the introduced prospects. Many financial advisors are challenged regarding converting prospects to clients. We found that their narrative when meeting prospects is a significant factor. A narrative is how financial advisors communicate the way they approach working with clients.

Three Types Of Narratives
Using the statistical techniques of factor and cluster analysis, we identified three types of narratives used by financial advisors when they meet prospects:

• In the expertise narrative, financial advisors convey that they are leading authorities with the experience and knowledge prospects need and want.

• The consultative narrative is about financial advisors communicating, after understanding their clients well, their ability to provide tailored solutions.

• The personal narrative is about building rapport based on “personal chemistry.”

Financial advisors may use different narratives in different situations, and there is likely to be some overlap among the three narratives, even with an individual prospect. Also, it is worth noting there is a lot of variation within these three narratives.

The most often-used narrative is expertise, regularly used by about 70% of financial advisors (Exhibit 2). The expertise narrative focused the introductory conversations on the capabilities of the financial advisors and their firms. This narrative is not only common among financial advisors; it is pervasive across the private wealth industry.

A far second is the consultative narrative regularly used by almost a fifth of the financial advisors surveyed. Here, the emphasis is firmly on the prospects, and the capabilities of the financial advisors are discussed very little and usually at the very end of the introductory meeting.

About one out of 10 financial advisors focus on building personal rapport with prospects—the personal narrative. Here, the goal of the financial advisors is to show similarities with prospects as a way of building trust. The conversations are commonly split between the financial advisor's life and prospects' lives.

Now, the question is the efficacy of the three narratives. A powerful trend emerged based on the financial advisors’ self-reported conversion rates (Exhibit 3): The more financial advisors explain that they aim to understand their prospects and provide customized solutions, the more likely a prospect will become a client.

With the expertise narrative, financial advisors convert about half the prospects they meet within six months. That percentage goes up to about 65% for financial advisors using a consultative narrative. The personal narrative only results in about one out of five prospects becoming clients.

The Power Of A Consultative Narrative
Many financial advisors believe it is necessary to demonstrate their knowledge and capabilities when they meet prospects. They see this as a way to demonstrate the value they can provide. The expertise narrative works about half the time, motivating financial advisors using it to continue doing so.

The decision to use the personal narrative, though not very effective, is usually a function of the personality of the financial advisors. These financial advisors tend to be socially comfortable and have high emotional intelligence.

The consultive narrative requires the financial advisors to make the prospects the center of the conversation. It is all about explaining who is in control of the process, and it is the prospects. There are different ways of developing and sharing a consultative narrative. The following, which proves highly effective, is a portion of a consultative narrative that we use to explain our approach to wealth planning (excerpt from Making Smart Decisions: How Ultra-Wealth Families Get Superior Wealth Planning Results, 2024):

How we apply the different financial strategies and products, strategize with you and your family, and approach the implementation are unique to you and your family. We work collaboratively with you to produce your wealth plan and, if you so choose, help implement it even as it is refined.

In working collaboratively, we are also working incrementally. There is a considerable amount of back and forth between ourselves and you and your family, so we can be sure you have the best wealth planning solutions possible.

In working incrementally, we often implement some solutions along the way instead of providing you with a comprehensive wealth plan and maybe getting to implementation. For example, with an ultra-wealthy family with extensive manufacturing interests, we identified many ways wealth planning could prove highly beneficial before we started speaking to the family members individually. We quickly uncovered a need for improvement in their asset protection planning. This failure was corrected before we began discussing solutions comprising their wealth plan.

Another essential quality of our approach is that we are results-oriented. It is only possible to get superior wealth planning results by getting results. Too many wealth planners equate providing a wealth plan with doing a good job. We are ultimately confident that ultra-wealthy families are not interested in a wealth plan but are incredibly interested in superior wealth planning results.

We will only use this or any narrative once we have an excellent basic understanding of a prospect. Based on those insights, we regularly adjust the narrative to resonate best. Still, the approach we always use regarding wealth planning is collaborative, incremental, and results-oriented.

It is fair to say that all financial advisors want to convert “ideal” prospects into clients. However, no private wealth industry professional (we are familiar with) always converts all the prospects they meet to clients. However, the goal is to increase the probability of getting new clients when meeting with prospects.

While most financial advisors succeed with the expertise narrative, it is less effective than the consultative narrative. However, for the consultative narrative to produce results, financial advisors must gain insight into the thinking and goals of prospects and modify their narrative accordingly.

Jerry D. Prince is the director of Integrated Academy, part of Integrated Partners. Russ Alan Prince is the executive director of Private Wealth magazine.