When you first start your practice, all of your energy and attention goes into building a client base as quickly as possible. This entails the usual advisor marketing activities such as networking, client events, referrals, and direct outreach to prospects. This is what I like to call “eat now” marketing. In this approach, your efforts are focused on doing everything you can to make sure that you bring in enough business so that you can eat now, pay the bills, and keep the doors open.
As your practice grows and your focus shifts from just building a practice to building a business with a team and a steady stream of new clients, your energy should also shift from being solely focused on those “eat now” marketing efforts and more toward “eat later” marketing activities. These are the activities that take longer to manifest referrals and clients, but that yield both a better quality of referral and a greater quantity of referrals over time. The most prominent and profitable “eat later” marketing activity is building relationships with Centers of Influence (COI).
For financial advisors, the best COIs to build relationships with are CPAs. This is because CPAs are often connected to the high net worth and mass affluent client base that advisors wish to target. They are also a highly trusted advisor to their client base and are woven into their financial discussions on a recurring basis. This gives them ample opportunity to recognize and direct referrals to advisors who can help their clients solve problems, meet goals, and identify additional strategies for growing and preserving wealth.
As your practice begins to stabilize, you should start looking toward CPA firms to build referral or revenue sharing alliances. This will allow you to develop a steady stream of highly qualified referrals from a trusted and influential source. Over time, these referral sources can far out shadow all of your other marketing efforts while also helping you grow faster.