Fidelity Investments has introduced a practice management program for RIAs designed to help them develop their referral networks through “centers of influence” including friends, existing clients, accountants, and attorneys, the Boston-based custody and clearing giant announced Thursday, June 24.
The three-part, no-cost Fidelity Practice Management Program includes regional workshops using a detailed guidebook, best practices and insights from RIAs, and one-on-one consultations with Fidelity’s relationship managers. According to Fidelity research, 51% of advisors’ new business comes from referrals, yet only 20% of advisors consistently ask clients and business partners for introductions.
“With more and more advisors joining the RIA market and competing for clients, referrals are critical to helping advisors grow their practices. These new resources can help them cultivate existing influencers, establish new referral sources, and generate qualified business leads,” said Michael Kim, senior vice president at Fidelity Institutional Wealth Services and newly appointed head of the Fidelity Practice Management Program, in a release.
The new program is heavily focused on an increasingly popular philosophy in RIA circles that focuses on “centers of influence” used to build an advisory business. These COIs radiate outward from trusted relationships to broaden an RIA’s client base.
The Fidelity Practice Management Program’s guidebook identifies these key insights from successful advisors on developing referral networks:
1. Make it a strategic initiative. An effective COI and strategic alliance network should become an integral part of an advisor’s long-term planning and review process.
2. Choose quality over quantity. Advisors should not spread themselves too thinly, but instead nurture a handful of trusted relationships that represent the core areas of expertise for their clients.
3. Be selective. Advisors should take the time to prepare and vet a list of potential partners and then conduct exploratory meetings to develop a relationship with the prospective COI and share information. Potential alliances could be with other professionals already working with existing clients, including accountants and lawyers.
4. Craft a compelling story. Create a credible framework that clearly shows potential COI and strategic alliance partners how both parties can benefit from working together.
5. Connect with the community. Be highly visible in the community to build a positive reputation and network of contacts.