Page 42 - Investment Advisor December 2022/January 2023

Making all the firm’s advisors aware
of this trend will prompt them, con-
sciously or unconsciously, to move
the trendline. We have seen this hap-
pen time and again in large and small
firms, because advisors want their
firms to succeed.
Those firms that aren’t watching
their trendlines often seek to boost cli-
ent referrals by changing their advi-
sor compensation program. Financial
sweeteners, they hope, will incentivize
advisors to ask for more referrals or go
out and drum up more.
Compensation changes (I assure you) Building or bolting on a service like tax planning
aren’t necessary. Our experience has
shown that simply making people aware or deeper retirement planning can increase client
of the trend and encouraging them to satisfaction and help make those you serve become
help is sufficient to start moving trend-
lines up. vocal advocates for your firm. We’ve regularly
seen the addition of value-added services increase
3. CONSIDER SERVICE AND CONTENT
CHANGES TO FURTHER INCREASE firms’ client referral rates.
YOUR REFERRALS.
What if the client-referral trendline has about your services. Many firm leaders ends, they intentionally push out retire-
been trending up, but you want it to believe that the answer is to put advisors ment-planning content.
move up faster? In that case, adding an through sales training.
additional service may be the answer. While that move can be effective, it 4. EMBRACE YOUR DATA AS IT IS
Building or bolting on a service like won’t move the trendline quickly. Why? RIGHT NOW.
tax planning or deeper retirement plan- Because such a strategy depends on Once again, the path to boosting organic
ning can increase client satisfaction and people who really don’t want to ask for growth starts with your own data.
help make those you serve become vocal referrals doing so again and again. Over Also, don’t get distracted by thinking
advocates for your firm. We’ve regularly time, if they stop asking for client refer- you need to hunt around for the best
seen the addition of value-added ser- rals, the trend will be flat again. trend-tracking software. The simplest
vices increase firms’ client referral rates. A more effective approach is to go and best way to track trendlines is to
But most firms that seek help with back to your data. use Excel or Google Sheets. Many firms
organic growth aren’t trending down- You might notice that you had many have been held back from tackling the
ward in client referrals or wondering more referrals in December than in any issue of knowing what’s trending by
how to make a positive trend even more other month of the year; in fact, that’s searching for a software solution.
positive. Nine times out of 10, the firms’ often the case. February and March also In addition, many firms are eager to
client referral ratios are flat. They have tend to be good referral months, as is compare their data with that of other
about the same number of client refer- August. I know this because I’ve looked firms in the industry.
rals as last year and the prior year. at a lot of advisory firm trendlines over Trust me when I say that working
This is the worst trendline to have. the past 20 years. off benchmarking studies only serves to
If a firm is adding clients, its client To boost growth, you should lean into make your firm similar to all the others.
referrals should rise in proportion to its your firm’s referral-heavy months by The best firms understand that their
growing client base. If not, a “flat” trend increasing the amount of relevant, help- business is unique, and thus their own
is really a negative one. ful content you deliver to clients. business data is their most valuable tool
When a firm’s client referrals are flat, The fastest-growing firms push out for driving growth.
client retention is often strong, but its content planning for the next year at the
clients aren’t promoting the business — end of each calendar year. As tax season Angie Herbers is an independent consultant to
which raises the question of how you approaches, they beef up their content the advisory industry. She can be reached at Adobe Stock
can get them to talk with prospects tied to tax planning. And, as the summer [email protected].

40 INVESTMENT ADVISOR DECEMBER 2022/JANUARY 2023 | ThinkAdvisor.com