Angie Herbers, the founder of Herbers & Company, discussed the outcomes of the 2023 Herbers & Company Service Market Growth Study in an interview with Wealth Management. The study reveals that most advisory firms face difficulties when it comes to turning potential prospects into actual clients.

According to Herbers, it is important to examine the three primary reasons. First, most firms do not prioritize close rates as a key revenue driver. Leaders in advisory firms often concentrate on metrics such as the influx of leads, acquisition of new clients, client retention, and total managed assets. They tend to operate assuming that increasing leads will naturally lead to more clients and assets.

Second, many firms lack a consistent method for tracking their close ratios. Technically, the close ratio is calculated as the number of new clients divided by the number of sales proposals. However, each advisory firm may define the client experience and the point at which a "sales proposal" occurs differently. Lastly, a reluctance exists to embrace the concept of "sales" within financial advisory practices.

Third, Herbers stresses that employing multiple sales approaches actually can result in significantly diminished close ratios, as it necessitates training advisors to excel in three distinct communication methods rather than focusing on expertise in just one. Advisory firms can initiate the process by tracking their close ratios and identifying advisors who may require additional support in communication training.

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