How to Have a Strong Pipeline in Spite of the Pandemic

The COVID-19 pandemic has brought major changes to how advisors are working with clients, especially based on the comments we received during our recent webinar, “How the Pandemic Has Changed Advisory Practices.”

In particular, many advisors who attended the webinar were very concerned about how to establish new client relationships during a time when it’s far more difficult to meet in person. Since that topic was of such high interest, I asked an additional three related questions of our panelists, Beverly Flaxington, The Human Behavior Coach® and founder of The Collaborative, a sales, marketing and teambuilding consultancy; Sara Grillo, CFA, a marketing consultant for investment managers and financial advisors; and Dan Solin, founder and president of Solin Strategic and Evidence Based Advisor Marketing.

Aren't client referrals still a great source of new business? In your opinion, why or why not?

Bev: We see this as one of the best sources for clients. We are continually uncovering opportunities that advisors have missed. In many cases, clients can be COIs. As an example, clients run their own businesses (we had an advisor parlay a funeral-home owner into a great referral source), and they are working with people who advisors might like to have for clients. It isn’t just, “introduce me to your friends and family.”

At a basic level, most advisors have no idea how to set up for referrals and there are often dozens lurking in their client base. It is a great place to start!

Dan: Yes, referrals are low-hanging fruit in the quest for new business. According to the World Wealth Report prepared by Capgemini in 2018, 44.4% of high-net-worth clients said they found their wealth manager through a referral from a friend or business contact.

It’s noteworthy that 33% used “active approaches based on personal research and making direct contact with preferred wealth managers.” The trend toward non-referral sources of new business has been accelerating for a while. According to Michael Kitces, based on the Investment News 2016 benchmarking study, referrals were no longer the primary source of AUM growth. It’s now “all about external business development and marketing strategies.”