Advisor growth strategies come in three forms: organic, inorganic and a combination of the two.
Organic growth — the most common — includes client referrals and marketing. Inorganic growth leverages mergers and acquisitions to add another firm and its existing clients to the fold.
Which growth strategy is right for you? Every firm needs to make that decision for itself.
But one strategy that is decidedly wrong is having no growth strategy. The trouble with not knowing what growth strategy you’re aiming for is that your firm is then subject to everything from cognitive biases to personal wants, a current mood and even whether you ate breakfast or not on a given day — rather than what the firm needs for its growth.
If you have no growth strategy, here are two areas to focus on that can dramatically improve your revenue.
1. Improve Your Client Referral Rate
Every firm should shoot for an annual client referral rate of 40% or more — meaning 40% of your existing clients should send at least one referral your way each year. I know 40% sounds high, but it’s possible because I’ve witnessed firms reach it multiple times.
Improving your client referral rate begins with improving your client experience in at least two areas:
Ask for referrals without asking. Part of the reason clients often don’t offer referrals is because they don’t know whether or not you can take on more clients. In your annual meetings, stress how much you appreciate your clients — and also let them know you’re growing.
By putting the idea in their mind that you are actively growing, you make it clear that your door is open to referrals.