Your strategic growth goals may involve acquiring a practice, and that’s certainly a solid objective—for the longer term. With so many advisors looking to buy a practice, there just aren’t enough to go around. In addition, buying a practice doesn’t happen overnight; it can take years to execute the transaction. This doesn’t mean you should give up on your goal, but you should supplement it with other strategies that can help you grow your business organically in the meantime. Here are four strategies to consider.
1) Identify Opportunities to Gain More Assets from Current Clients
One of the best ways to grow your business is to gain additional assets from people who already know your value as an advisor: current clients. You might think you already have all of your clients’ assets. But according to research conducted by Spectrem, one-third of all millionaires use more than one advisor for their financial needs. So, it’s likely that there are client assets held away from you.
Here are some strategies that focus on your existing clients:
• Leverage client meetings to identify opportunities to ask for additional assets. A useful conversation starter might be, “Asset allocation works best when all of a client’s assets are included in the plan. Do you have any assets not held with me?”
• Let clients get to know you through effective branding—communicating who you are, the people you help, and the problems you solve. Ideally, your brand should convey the experience of doing business with you.
• Tell your story through your professional biography. Remember, merely listing your credentials doesn’t make you different. Instead, focus on things that are unique to you (e.g., your family, hobbies, activities, and community involvement).
• Hold powerful client events to strengthen existing relationships. Done right, social time spent with clients helps create loyalty and goodwill, plus spurs introductions and referrals.
2) Gain Introductions to New Clients
If you’re looking to grow your business, gaining introductions to new people should be high on your list of priorities. Research conducted by ClientWise finds that the best-of-the-best financial advisors acquire more than 70 percent of new assets and relationships through referrals from existing clients or other advocate sources. Here are some strategies for finding new clients (and their assets):
• Ask for introductions to specific people. And when you are offered a referral opportunity, look for ways to turn it into an introduction.
• Develop strategic alliances with centers of influence (e.g., CPAs, attorneys, insurance agents). These professionals tend to have trusted relationships with their clients, and their referral to an advisor carries a lot of weight.
• Consider focusing your business on a profitable niche, as this gives you a way to be strategic about the clients you wish to serve.
• Leverage your online presence through LinkedIn and other social media platforms.
3) Nurture Existing Relationships
Even if you’re not looking to grow, one of the best ways to ensure the continued health of your practice is to keep existing clients. Sounds simple, right? But many advisors don’t pay enough attention to the clients they already have. Your goal should be to keep them happy and engaged, which can lead to increased assets and more referral opportunities.
• Focus on what really matters to clients: the relationship with you as their advisor, rather than just investment performance. Simple actions like calling them back quickly when they have a question or concern, making time for them when they need it, and remembering details about their families and careers can go a long way in building trusted relationships.
• Get in the practice of frequent, non-investment-related communication, which has been proven to be an effective way to build loyalty. The optimal number of client touches seems to be between 24 and 28 times a year. How does your practice stack up?
• Reach out to clients across generations, as the children and grandchildren of your current clients will most likely receive an inheritance or serve as their beneficiaries.
4) Buy a Practice or Hire an Advisor
To help hit their growth targets, many advisors consider buying a practice or bringing on a new advisor. Both of these strategies can lead to top-line revenue growth, but they also come with a considerable investment of time and energy, not to mention money and resources. Before undertaking either of these strategies, be sure that you clearly understand that these are long-term revenue-generating approaches, not quick fixes for a short-term business need.
• If you’re considering buying a practice, your vision for the future can help you decide whether this approach makes sense. Just as you guide your clients and manage their assets to help them reach their goals, so too should you weigh buying a practice against your own business plan and goals.
• Keep in mind that bringing on a new advisor can not only increase overall firm production, but also brings the added benefits of camaraderie and the backup of another producer.
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