President's Blog - Attracting New Business Among the Wealthiest Investors


There is no “correct” way to attract new clients. Any effort an advisor makes to bring in new customers can reap benefits, even if those efforts do not create immediate results.

Many advisors place themselves in front of customer’s eyes through advertisements. Others network, using one contact to find another and another, hoping one of those contacts turns into new business. Other advisors conduct seminars, while others attend business conferences and shake a lot of hands.

Still others use the tried-and-true method of cold-calling potential clients.

Advisors are required by the circumstances of their occupation to sell themselves occasionally in order to attract clients. It is certainly not the best part of the job, but the more effort an advisor puts into finding new clients, the less time they will have in the future to chase new clients (because they will be busy servicing their current clients).

While some advisors swear by their methods to acquire new business, the truth is that there is no “best’’ method to promoting yourself to potential clients. In fact, our studies show that everything works to some extent.

Our recent wealth segmentation series study – Advisor Relationships and Changing Advice Requirements – asked investors in three different wealth segments to describe the method of their initial introduction to their financial advisor. There were eight possible choices, and some were clearly more effective than others.

Topping the list by a long shot, however, was referrals. More than half of all Ultra High Net Worth investors with a net worth between $5 million and $25 million found their advisor through a referral. Most often, the referral came from a business associate.

What that means to advisors is that the best way (and probably least expensive way) to attract new clients is to do the best possible job for the clients you currently have. While some satisfied investors are unwilling to refer their advisor for a number of reasons, many are willing to do so, and referrals come with an immediate trust factor. After all, what business associate wants to hook up a co-worker with a poor advisor? That would make for a poor office environment.

But do referrals bring in enough business? If the answer to that question is “No”, then advisors and financial providers need to consider other methods of attracting new business.

And here is where the research we did provided a surprise: After referrals, the most common way an investor and advisor begin working together is when the advisor makes the initial contact.  In the study, 12 percent of UHNW investors said their advisor made the first move to begin the relationship, and 18 percent of senior corporate executives said their primary advisor contacted them first.

Such contact does not necessarily come in the form of cold-calling, but it certainly can. Other ways in which advisors make first contact is to collect names and phone numbers from seminars, conferences and even dinner parties, and then place a call, or send a text or e-mail.

Cold-calling may have a bit of a bad rap, but not only does it work, it shows initiative. It forces an advisor to promote his own talents as well as develop his people skills. And it is far more effective than seminars (5 percent of investors contacted an advisor after a seminar), general advertisement (3 percent), or advertisement in a financial publication (2 percent).

Another Spectrem report, Effective Communication Techniques for Retaining Current and Attracting New Clients, shows that younger affluent investors are reading financial advertisements on sites like Twitter and Facebook. It is possible that in years to come such advertisements will be more likely to produce new relationships.

The bottom line is that an advisor who does not make a strong and varied effort to attract clients is an advisor who probably needs to make a stronger effort to attract clients.