Referrals continue to drive the growth of financial advisory practices, according to a research report from Cerulli Associates reviewed by ThinkAdvisor. The report shows that referrals from clients, friends, and family members generate 54.2 percent of new advisory relationships, making them the most significant source of new business for advisors.
According to ThinkAdvisor, the findings also highlight the importance of professional networking. Referrals from so-called "centers of influence," including attorneys, CPAs, and other professionals, account for 13.9 percent of new clients, ranking as the second-largest source. Cerulli notes that practice management professionals view several strategies as particularly effective for building these strategic alliances, including holding joint meetings with clients or prospects, connecting with other professionals through shared personal interests, and referring clients to one another to organically develop professional relationships.
Andrew Blake, associate director of wealth management at Cerulli, emphasized that partnering with other professionals to exchange referrals remains a powerful marketing strategy. ThinkAdvisor reports that Blake explained that nearly two-thirds of practice management professionals consider collaboration with centers of influence or the formation of strategic alliances to be highly effective. Blake noted that these partnerships not only generate new introductions but also allow advisors to deliver broader services by leveraging the expertise of trusted professionals outside their firms. According to Cerulli, networking will continue to play a central role in helping advisors achieve organic growth, particularly when in-house resources limit the scope of services an advisory practice can provide.
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