If advisors had three wishes, they might ask for referrals, referrals and referrals.
Referrals from existing clients to their friends, colleagues and family members are invaluable to advisors in building successful businesses, but there are many roads to getting those rich connections, according to two advisors and a business coach, who recently discussed their different approaches.
For Brian Ouellette, a former financial advisor who is now a business coach, building a successful financial advisory business is done through tapping into the top 10 to 25 existing clients of the financial advisor. Each of those clients can reach out to a friend or relative, who in turn can reach someone else, Ouellette said.
“The result is a network of at least 6,000 people who have a connection to your firm,” he explained. The key to successfully onboarding those prospects is to provide educational material that addresses a specific problem. “Most advisors’ marketing materials are too generic. You want to take a specific problem, and provide a solution. That builds trust into a situation," he said.
“An advisor’s number one center of influence is those top 10 to 25 clients,” he said. “If you go beyond 25, you lose the personal connection to your firm.”
Ouellette’s system starts with “providing valuable content [in marketing material] as a lead magnet,” which should prompt prospects to ask for additional information. This step, in turn, should mean “you have landed a very warm lead, especially when the prospect was connected to you by one of your top 25 clients,” he said.
Ouellette, who is the founder of ProAthleteDirect's new AUM gathering software app, AskMyAdvisor, based in the Seattle area, originally developed his referral techniques from working with professional athletes, a niche where it is particularly difficult to develop a personal network, he said. The current economic and social climate is favorable to advisors who are trying to build their businesses.
“Covid-19 has opened up the single best time, in more than the past 100 years, for financial advisors who can help lead investors through this time, while quickly adding new connections, referrals, clients, and AUM,” he said.
Eddie Ghabour, managing partner and wealth advisor at Key Advisors Group in Lewes and Dover, Del., has a successful track record of referrals, with at least 80% of all new clients starting out as referrals.
“We hold a lot of educational and social events and ask clients to bring friends and relatives,” Ghabour said. “But we do not do a sales pitch. Advisors have to get away from over-selling themselves.” Events are now being held by video.