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October 07, 2024
The referral myth and how to avoid it
The referral myth and how to avoid it
Successful financial advisors do not want to share the secrets of how they are growing their businesses. They have spent a lot of time money and energy on finding how they can grow their practice. They have made a lot of mistakes tried a lot of different things and discovered ways that work for them and more importantly ways that don't work for them. So the next time you ask a successful advisor about how they grow the business and they say by referrals, they just don't want to tell you how they built their growth machine for their practice.
What is the referral myth?
Let's face it, referrals are fantastic and a great way to grow your business, but it does not get you to the next level. Does someone with $1,000,000 refer someone with $5 million? Typically not. Does someone with five million refer someone with 10 or $20 million? Your referrals get the same type of clients over and over, so don't expect different results. So if you want to move upmarket here are three things to think about.
- Define your ideal client on paper
It starts with getting out of your comfort zone and clearly defining ideal clients and ideal families. it is known in practice management that 75% of financial advisors don't have a clear definition of who an ideal client is. ( The Future of Practice Management, an inaugural study by the FPA Research and Practice Institute a program of the Financial Planning Association® (FPA®) -December 2013)
You need to have an ideal client definition on paper and be able to share it with clients' prospects and centers of influence. If they don't know your ideal client and you don't know either, how will you ever find them?
- Deliver more value
It is the time of year when hockey is starting up again. Imagine you're trying out for a new hockey team. You know you have to be better than the players that were on the team last year. You need to study and watch them, but more importantly, be better than them. Think differently. Instead of prospecting, be prospected. Show up where your competition is, and show them how much better you are than them. Look at all their marketing, website, and communications and be better than them. Spying on your competition is not a new phenomenon, it is a way for you to understand how to deliver more value. Pick one to three competitors and start spying on them. Only then will you understand the value they deliver and how you will deliver more.
- Your marketing mix elements
Elite financial advisors don't do one thing in their marketing to make them successful. Being a judge on the wealth professional awards and working with elite advisors and their teams, I see what goes into their marketing and how they build their marketing mix. Here are the four elements.
- Digital marketing including inbound marketing
- COI network of professionals and network of influencers
- Events in person and online to meet people Including all types of events
- Current ideal clients and their families focus on siblings and parents
Here are four questions to ask yourself in competing with another elite financial advisor. Do they have digital marketing, or inbound marketing, and are they using video? How big and how long have they had their network of professionals, and what do they do on a monthly basis with their network of professionals? How often do they do events and meet people? How many ideal families do they manage? This year has been a difficult year for financial advisors wanting to grow their practice. Markets are down, revenue is down and staff expenses are up. Time to turn on your growth engine to balance the scales. What can you turn on today to get growing? Check out some successful firms here https://www.financial-planning.com/list/ria-leaders-2022-top-20-firms-by-aum
How about your goals for your practice in 2024? Our Practice management resources
Comprehensive Practice Management checklist
https://practicemanagement.getresponsepages.com/
Fee Audit checklist
https://feeaudit.getresponsepages.com/
88 Marketing strategies checklist
https://famarketingplan.getresponsepages.com/
Download our "Exclusive prospecting checklist" to help acquire more ideal clients this year.
https://prospectingchecklist.getresponsepages.com/
Discover:
- Key processes to finding and acquiring more ideal clients for financial advisors.
- How to enhance your offers and your value promise.
- Blog on the best practice management strategies to help you manage and build your financial advisor practice and team
We are here to serve your practice, let’s talk
Contact us to help get clarity around your goals on paper, and have the goals conversation by contacting Grant at grant@ghicks.com or click on the link to set up a no-obligation 20-minute discussion https://my.timetrade.com/book/JMTNJ regardless if we work together, let’s have a chat and listen to your biggest practice management concerns to help you get clarity around your future business.
Grant Hicks, CIM, is President of Advisor Practice Management and co-author of “Guerrilla Marketing For Financial Advisors” 1st and 2nd edition. www.advisorpracticemanagement.com for speaking, workshops, or coaching, contact Grant at grant@ghicks.com Grants combined financial advisor clients manage over 5 billion AUM, and earn over $50 million dollars combined!
Enthusiastically yours,
Grant Hicks, CIM, President
Advisor Practice Management
www.advisorpracticemanagement.com
PO Box 382 Lantzville BC V0R 2H0
Cell 403 970 8895
Email grant@ghicks.com
PS Where do you want your financial practice to be at the end of 2022? AUM, Revenue, and time off?
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