Financial Advisors: How to Convert Relationships into Clients

Most financial advisors have the intention of casting a wide net early in their careers. This is logical since more clients should lead to more income. However, nothing could be further from the truth in this arena.

Unless a financial advisor has spent decades building up a strong brand and has been lucky enough to connect with the right people at the right time, he or she is not going to see a lot of sustainable income. That’s because the wider you cast your net, the more irrelevant you become. (For related reading, see: Six Things Bad Financial Advisors Do.)

On the other hand, the more specific and niche-oriented you become, the more you will look like an expert. That said, the correct way to approach a niche is not to approach it at all. Instead, let the niche come to you. For example, do you enjoy fishing, golfing, boating or playing cards? Whatever your interest, focus on that niche from a business standpoint. This is much more powerful than most financial advisors realize. The primary reason is because it will be much easier to build relationships with your clients. (For more, see: 5 Vital Questions Advisors Should Ask New Clients.)

If you enjoy fishing, then it would be easy to invite one of your clients for a day out at sea. If you had cast a wider net and built a client base with a vast array of interests, then it wouldn’t be as easy to build relationships. If one of these clients enjoyed playing golf (and not fishing) and you were terrible at golf, then you would have to pass on an invite in order to avoid embarrassment. A lunch might be good once in a while, but it’s not going to lead to a concrete and long-lasting relationship. And without relationships, clients wander. (For related reading see: Why Clients Fire Financial Advisors.)

Look at this from a personal standpoint. Take a quick minute to go through your list of friends. Chances are good that the majority of those friends have the same interests as you. The best part about focusing on a niche where clients have similar interests is that you become the go-to name in that niche when it comes to financial advisors, especially if you do a good job for current clients. Another big positive is that you will find it much easier to retain business. Someone who goes fishing with you a few times a year is much less likely to drop you than someone who goes to lunch with you once in a blue moon, or even worse, someone who you usually only communicate with over the phone. If you focus on a specific niche, you will see your conversion and retention rates move exponentially higher. (For more, see: Tips for Breaking the Ice with New Clients.)

Any successful salesman knows that it's about people, not numbers. If those people enjoy spending time with you and you can help them solve a problem, then it should be relatively easy to land and maintain clients. But don’t fall into the money trap. If you attempt to focus on a niche where you’re not that comfortable just because you want to target a client base with a high net worth, then you’re more likely to fail. People are much more leery of financial advisors looking for a sale than they were in the past. If you’re not genuine, they will spot it right away, whether they let you know about it or not. The goal should not just be to expand your client base in a niche, but to develop genuine friendships with those clients. When your job is fulfilling in this way, it leads to happiness, success, and sustainability. (For related reading see: Want to Impress Clients? Show Your Due Diligence.)

In addition to building relationships with your clients, build relationships with business professionals. CPAs, Tax Attorneys, and Private bankers are your gateway to increasing your high-quality client base. Using the same approach as described above, attempt to develop genuine relationships with people in these fields. Sharing referrals can be mutually beneficial, especially if both parties have the client’s best interest in mind. If you succeed in this area, then you will significantly reduce marketing expenses and prospecting time while growing your top line. This is the epitome of efficiency. (For more, see: What Type of Person Needs a Financial Advisor?)

If you want to build a fulfilling, profitable, and sustainable business as a financial advisor, then you need to focus more on relationship building than cold calling and marketing. The first and most important step is easy, which is to focus on people who have similar interests. Once you establish a trustworthy presence in this market and maintain relationships, you will see your business thrive. (For more, see: Tips on How Financial Advisors Can Talk to Clients.)