Study after study has found that the No. 1 way financial advisors find new clients is by getting referrals from their existing clients. They might pursue other approaches that work—giving presentations and going to networking meetings. But these tacks rarely get the same results as another person talking them up.

These same studies also consistently show that financial advisors get their most profitable referrals from influential people in other professions (also known as “centers of influence”)—accountants and attorneys, for instance. If an advisor is looking to work with wealthier clients—people with $20 million or more in investable assets—the most effective way to do it is to get a referral from these professionals in other industries.

This is especially true when people are seeking services other than investment help. Successful business owners, for instance, turn to their accountants and attorneys for help when they are looking for experts in non-qualified deferred compensation plans, key person insurance and related services and products.

Without question, these sources also help clients find investment management aid and financial products. None of this is a revelation to financial advisors, yet few of them have developed referral pipelines.

In other words, they haven’t built strategic relationships, say, with a particular accountant, for example—someone actively looking for clients he or she can send to the financial advisor. Someone who can strongly endorse the advisor’s technical prowess and relationship skills. Those advisors who effectively establish and nurture these pipelines receive a steady stream of high-quality clients.

There are three ways to build these networks.

No. 1: You Choose

Probably the hardest thing to understand is that it is you who should decide which professionals to associate with. In the end, it is not their decision. You choose them, they don’t choose you. Your leverage comes from the technical knowledge you bring, an understanding of their business models and your ability to help them become more successful. Also, you can only work with so many of the ones who might want to work with you, so you have the law of small numbers on your side.

No. 2: Understand the Business Model of Each Center of Influence and Help Them Grow Their Practices

First « 1 2 3 » Next