Many advisors assume that if they do great work for their existing clients, then client referrals will result in a steady stream of new business. Industry data align with this assumption: Client referrals represent 70% of RIAs’ new business, according to Capital Group research. But boosting referrals beyond your existing clients can turn a solid business into a booming one.

The bottom-line benefits and appeal of landing new clients via referrals from centers of influence (COIs) are real and quantifiable. COIs are people who work with or are around the types of clients you want to serve, or who could potentially connect, introduce or refer you to new prospects or streams of business. Research from DeVoe & Company found that 17% of RIAs’ new clients come from COI referrals. In addition, these new clients represent 23% of new assets, which highlights the quality of the new clients COIs are bringing in.^*

“It’s critical to have centers of influence as brand advocates for your firm,” said Gordon Abel, chief marketing officer of Dynasty Financial Partners, an advisory platform with 53 network firms and more than 325 financial advisors across the United States. “COIs should be a major part of every RIA’s referral strategy. These relationships work best when the businesses are truly complementary and add value to the client experience.”

Through our conversations with advisors and marketing professionals who have extensive experience building business through COIs, we have identified five keys to growing your practice with the help of COI referrals.

1. Expand your focus beyond the usual suspects

Referrals are the lifeblood of an RIA business. And it is certainly valuable to have respected and trusted professionals in your community that think highly enough of your practice and approach to send potential clients your way. “Centers of influence are critical focus areas for RIAs today,” said Joslyn Ewart, founding principal at Entrust Financial in Wayne, Pennsylvania. “COIs can be in so many different arenas, from professional organizations and accountants to arts organizations and community boards,” Ewart added. 

That’s why it makes business sense to deliberately cultivate relationships with COIs of all kinds, including members of business associations and networking groups as well as local professionals like accountants and mortgage brokers. 

Indeed, these valuable business contacts can include trusted influencers from a wide range of occupations, all of which provide distinct types of professional support to existing and prospective clients. It’s important to help your advisors understand that COIs include not just lawyers, bankers and CPAs, but also realtors, insurance agents, art dealers, medical practitioners, executive recruiters, life coaches, marriage counselors, personal trainers and car dealers. 

Many advisors seek to provide holistic services to their clients. That often means teaming up with qualified professionals in different areas of expertise to best serve clients’ overall needs, especially during key life moments such as having a child, buying a first home or coming into a big inheritance. Creating these COI relationships can also afford you the opportunity to showcase your firm’s professionalism, client-first approach and solutions-oriented skills to a new circle of influential professionals. 

The goal is to turn these COIs into brand ambassadors for your practice and jump-start an arrangement where you and the COI serve the same clients together, as well as refer clients to each other. “For our firm, our COI relationships are rooted in a sharing of values and trust that the person they refer to you is going to be well taken care of,” Ewart said. 

2. Rank and nurture existing COI relationships

 So if you want to build a COI marketing strategy, where do you start? “Mapping your existing COI relationships is the best way to build a foundation,” Abel said, adding that advisors should invest most of their time and energy on existing COIs that have been the most fruitful in generating new client leads. “Those you really need to stay close with are those you’re already working with,” he added. “But you also must continue to expand your COI relationships by identifying new potential partners during client audits.” 

Abel recommends prioritizing COIs by giving them gold, silver or bronze rankings (for internal purposes). Gold-level COIs are your closest relationships that have already referred business to you. These COIs should be treated like VIPs. That means checking in by phone monthly, getting together for lunch quarterly, communicating regularly by email, inviting these brand ambassadors to industry events and saying thanks by referring business to them.

However, don’t forget about silver-level COIs. Silver COIs are those whom you’ve met with but haven’t received any referrals from yet. And bronze-level COIs are those whom you have just had brief contact with to date.

Building your COI footprint is a long game that requires that you stick to your strategy, adds Ewart. Don’t expect to get a new client referral the day after your first business lunch with a potential COI. It takes time, often more than a year, to build both a relationship and trust. In fact, you might have to make referrals yourself before you get a referral in return. Prove your value first, and the referrals will likely follow.

“On the first pass, it’s not going to be a slam-dunk,” Ewart said. “Cultivation is the operative word. You just have to keep at it. It’s an ongoing process, and you have to be eternally patient. But it works.” 

3. Mine your client relationships for COI referrals

To develop new COI relationships, tap your existing clients and new clients for referrals during the onboarding process. “As you are onboarding new clients, part of your process should be asking questions like, “Who is your estate attorney? Who’s your trainer?’” Abel said. “You should use the client onboarding process to see if there are gaps in your clients’ COI list that you can fill. This provides mutual benefits for you and the client. It expands your network of potential COIs while helping to ensure you can serve your clients holistically.”

Conduct an audit of your clients to see what other professionals they work with and create a fresh list of COIs. And circle back to clients who have missing COI information and ask them to provide names and contact information. 

As Ewart’s firm brings on new clients, for example, after analyzing the client’s assets and financial goals, they hold “professional network meetings” with the client’s key COIs, such as CPAs, insurance agents and attorneys. The goal is to make fresh COI connections, ensure they’re serving the new client in the best way possible and confirm that there are no gaps in their plan. “We lay out that this is our new client, this is what we’re trying to accomplish,” Ewart explained. “Then we ask, ‘What do you see that we need to address to ensure we really direct them well?’”

4. Address pain points and potential solutions

To demonstrate how your firm and the COI can work together in a client’s best interest, you can mention a problem the client is facing and propose a customized solution. “RIA firms can highlight their value by addressing client pain points and sharing meaningful and credible information to help resolve the problem,” Abel said. “Really help the COI understand there’s common ground and a safe place to talk about pain points and work together to solve them in a complementary way.”

“You have to let the COI know that you share the same concerns that they have,” Abel added. “That we have a single problem in front of us and that we’re going to solve this pain point together and do what’s best for our client — together.”

After demonstrating how you can help solve the client’s problem in a way that is a win-win for everybody, finish these sessions with COIs by asking if your customized solution was helpful and whether your approach to problem-solving could be useful to a wider group of clients. 

“You must nurture the one-on-one relationships and play in the same traffic circles,” Abel said. “You need to be present when triggers and moments happen so you are top of mind for the COI.”

5. Execute a step-by-step plan to ace new COI introductions

Don’t be afraid to ask your clients to introduce you to potential COIs. Develop a consistent internal strategy that arms your advisory team with a repeatable script and process that boosts the chances for success when reaching out to existing clients for help. “You need to train your team how to ask for the introduction and give them a roadmap and structure to follow,” Abel said.

For example, you can create a script that your advisors can use to get answers to questions from clients that will offer insight into whether other professionals they work with might make a good COI. Questions may include examples like: Have you had a valuable experience collaborating with this person? What’s the person’s specialty? Would I benefit from connecting with him or her?

The key is to set up ways to continuously engage with COIs. In addition to mining your client relationships for COIs as covered above, other ways to accomplish this may include adding COIs to your email newsletter or blog list, inviting them to client events and conferences, or inviting them to your office to see your client-focused team in action. 

Focus on your COI strategy today

The bottom line is your next COI could turn out to be anyone who plays a key role in your clients’ lives. So it’s important to commit yourself to ongoing relationship building and constantly build a pipeline of future COIs in an intentional way. As you reexamine your COI strategy, don’t hesitate to reach out to Capital Group’s RIA support team, who are committed to helping RIAs achieve their goals and can connect you to additional practice management resources at Capital Group.

^* Source: “Getting Past the Fear of Asking for Referrals.” FINSUM, November 7, 2023.