Business Development How to be a referral magnet in the advisory business

How to be a referral magnet in the advisory business

A recent white paper published by Stephen Wershing, titled The Client Driven Practice, says that advisors can benefit by taking advice from their clients.
Team Cafemutual May 8, 2017

The white paper by Stephen Wershing says that while referrals are the best way to expand the advisory business, referral marketing works best only when an advisor uncovers what clients want most. The paper suggested advisors set up a client advisory board to understand clients better,

“An advisory board is a collection of some of an advisory firm’s best clients, brought together to advise the advisor on the strategic direction of the practice. It is the most effective way of stimulating high level and rich conversations about how to leverage the greatest value the advisor offers to clients,” the white paper explains.

The role of a client advisory board

  1. Identify your highest value: The key role of a client advisory board is to identify the value proposition given by the advisor that attracts clients. “This is perhaps your greatest opportunity to discover your real target market. Your clients are the ones who know what is most important to them. And by engaging in a facilitated conversation about what the clients value most about their relationship with you, you will learn how to define your target market,” the white paper suggested.
  2. How to define your offering: One of the great failings of advisor marketing is the overreliance on a small number of clichés to describe what you do and what value you can bring to the table. “Hearing it from people who experience it from you and who are not in our business will give you fresh language that can help give your marketing a way to distinguish you from other advisors,” says the white paper.
  3. Referrals directly from board members:  Advisors can attract referrals directly from advisory board members. “Any client, who gets involved in an extensive conversation on how to provide the best service, is naturally going to spend a lot of time thinking about their own friends and acquaintances who would benefit from working with that advisor. Things that advisory board members learned during these conversations can also provide new reasons to refer people to the advisor,” it says.


Composition of the board

The white paper says that while many advisors might think that they will be at an advantage if the advisory board represented the entire spectrum of clients in their practice, it is more beneficial to concentrate on the ideal clients.

“A clear and effective market niche is fundamental to a successful marketing plan. To help achieve clarity in tailoring your service mix and marketing strategy, your board should be composed of clients who represent your ideal client, your target client. Define your target market, and comprise the board of people like that,” it says.


The white paper says that a successful referral-marketing programme results in clients thinking of you and mentioning your name when their friends, acquaintances, and business associates express some financial challenge or ask to be referred to a financial advisor. While it is important to always be asking for feedback when meeting with clients, and systematically collecting it via client survey, the client advisory board is the most powerful tool in the financial marketer’s toolbox.

Identifying the best people to invite to participate on your board, understanding how to formulate objectives, retaining professional facilitation, truly being open-minded to client feedback, and acting on the board’s recommendations, will help make your practice a referral magnet.


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