Skip navigation
up-arrows-dollars.jpg DNY59/iStock/Getty Images Plus

In the Growth Race, These Firms Are the Silent Winners

Advisors who are great at organic growth recognize that when it comes to building your client referral rate, you can travel fast—by asking for referrals—or you can travel far by focusing on client experience and advisor training.

It might seem like the vast majority of advisory firm growth is coming from mergers and acquisitions. M&A is exciting, and the level of inorganic growth taking place in the industry right now is undeniable.

But many more firms have moved the needle by doubling down on organic growth strategies. These firms are the silent winners in the contest for growth and scale.

How are they doing it? Robust organic growth can be elusive, even for many firms that are committed to the idea. Those that are enjoying the most success have learned to distinguish between actions that feel good in the moment and actions that yield durable, ongoing results.

Travel Fast or Travel Far

One of the pandemic’s silver linings is that it has fueled innovation around growth. Firms that haven’t wanted to make acquisitions, or didn’t have the resources to do so, have gotten creative, specifically around expanding the client referral rate (CRR). This key performance indicator is calculated by dividing the number of clients who make referrals into the total clientele. A 50% client referral rate means that of a firm’s 100 clients, 50 have provided successful referrals.

No matter where a firm’s CRR is today, many advisors rely on their clients to boost it. They ask directly for referrals during meetings, they include referral requests at the bottom of their emails, they send email campaigns letting clients know they have got capacity for new business, and so on. These aren’t bad strategies, but they do not maximize the client referral rate. Two things do that: client experience (CX) and advisor training.

CX and advisor training aren’t always fun, and they don’t have the potential to yield immediate results in the way that asking clients for referrals does. But advisors who are great at organic growth recognize that when it comes to building your CRR, you can travel fast—by asking for referrals—or you can travel far by focusing on CX and advisor training.

In our consulting experience at Herbers & Company, many advisory firms prefer to focus on CX rather than creating and fine-tuning their training programs, simply because CX is a little more enjoyable. But advisor training takes a firm the farthest. So, let’s delve a bit deeper into that topic.

The first step in advisor training—and this may seem counterintuitive to many organizations—is speeding up communication between advisors by opening the communication lines. In other words, many advisors get stuck in the day-to-day with their heads down doing client work, and the only communication between team members is telling each other what needs to be done. The problem with this is firms can get in a pattern of management, not learning.

To overcome this, we facilitate a process that we call “sharing to grow.” This means, we help firms give space to their advisors to start sharing with other team members anything and everything related to seeking client referrals and turning those referrals into business. That includes what they are learning on their own, by reading and through conversations with clients, prospects, colleagues, and others. It includes any opportunities they see, experiences they had, and any problems they are encountering. When we’re sharing, we are learning and helping others to learn and grow. When we are not sharing, we’re missing an important growth opportunity.

With that, the first step in training advisors to increase client referral rates is not mapping out a training program, filming a video, or writing a long email. The first step is encouraging your teams of advisors to share and to share more within your organization.

Over the past year we have seen many firms move to a virtual environment, reducing opportunities for in-person sharing that flows naturally. So it’s especially important to intentionally develop communications systems that allow advisors to “share to grow.” These systems can use phone or email as the communication medium, but a dedicated technology platform is often most effective. These widely available training platforms enable users to post links and articles, to address problems and ask each other questions.

Advisors may not be completely comfortable using a training platform right away. It will not feel natural to many of them to exchange information without the goal of a specific outcome. Sharing is not meant to provide instant gratification any more than the client discovery process is meant to multiply their wealth. But, by increasing communication between advisors, it reveals what is missing in training.

Think about it this way -- when people start sharing and talking more, specific areas where additional training is needed comes into focus. This allows a firm to then pull together training programs that build consistency in the CX, and the better service and end communication to the client becomes even more clear. The clearer a person becomes in how they communicate, the better their service gets, and that drives referrals. But the process requires patience and persistence, and it often takes three to four months to fully reveal where the gaps in training are.

So now as advisors start sharing firm leadership, they can effectively and comprehensively identify problems and opportunities and those can be trained on. We have raised our awareness of what is working and what’s not working within client services. We now have a ton of new information, which, by the way, no amount of data could ever reveal.

How does leadership apply this new knowledge to advisor training? It can seem like a daunting question, but the way forward is to put one foot in front of the other. To start, we identify one improvement that would boost the organization’s CRR. For many firms, it’s sales training, especially how best to conduct a prospective meeting. So, we start by identifying the steps we can take to support advisors in the prospect conversion process.

Sales is just one example of where organizations might begin training, based on the needs that their share-to-grow exercises reveal. There are many others. But the point is to start training on one distinct need and then move to the next rather than mapping out a complete training program.

Continual Improvement

What happens once you have finished one small training program? In almost all cases, you realize there’s more training to do. The fact is that we can’t expect team members to master a skill with just one round of training. The most effective approach is to teach the skill, then let them practice it and see what questions come up and what ideas for improvement are uncovered. Then we enhance the training program and retrain, over and over. It is not uncommon for firms to ultimately create three or four drafts of their training program, each an improvement on the previous one.

No matter size or scale, advisory firms that want to lever up their organic growth by increasing their CRR must invest in training. There is no one-size-fits-all template for effective training, and there are no shortcuts. Your training program must match your firm’s unique needs, assets and opportunities, which can only be identified by increasing communication within your team. Doing it right takes patience and commitment as well as initiative—and the best time to start is now.

Ultimately the firms who grow the fastest are also the ones who train the best, and the good news is, every firm can do it well.


Brandon Moss, is the chief marketing officer and senior consultant at Herbers & Co

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.