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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.

1. 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?

2. 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.

3. 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.

1. Digital marketing including inbound marketing
2. COI network of professionals and network of influencers
3. Events in person and online to meet people Including all types of events
4. 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

Would you like a copy of our Comprehensive Practice Management Checklist for financial advisors?

How About Your Goals for Your Practice in 2025?

 While each financial advisor's practice may have a different approach, advisors need to understand where their practice needs help, and will they get the right help for the right part of their practice. What areas does your practice need help with?

Free Resources:

21 Page Technology Checklist to Become a Future-Ready Advisor

Fee Audit Checklist for Ideal Prospects

Updated Comprehensive PracticeManagement Guides

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 Jeff at jeff@jeffthorsteinson.com 

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.

To book a NO obligation conversation with me to discuss practice management or coaching click the following link https://calendly.com/jeffthorsteinson/30-minute-q-a-explore-apm and let’s talk.

Jeff Thorsteinson, Grant Hicks and Advisor Practice Management's combined financial advisor clients manage over 8 billion AUM, and earn over $80 million dollars combined!

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