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How Practifi Helps Advisors Harness Their Network To Drive Referrals

BY allison lasley

Did you know approximately 700 independent RIA firms are started each year and more than 1,600 advisors join the RIA industry annually? While these numbers paint a positive growth outlook for the wealth management industry, they also suggest an increasingly crowded and competitive financial advice market.

To become a leading RIA in the country, a firm must do more than the status quo. Growth-oriented firms not only service clients effectively but also know how to grow their client base and retain them. Generating referrals remains one of the most effective ways advisors can bring in new business. However, many advisors still struggle to manage and track everyone in their network, let alone harness the potential of their influential contacts.

Built for the needs of growing RIAs, Practifi helps advisors organize their network, navigate their client’s world, identify influencers and build stronger referral partnerships. As a result, ambitious RIAs can organically grow their client base and develop long-lasting relationships with important clients and partners. 

Read on to find out how Practifi helps advisors harness the power of their network.

1. Making sense of a complex network

Advisors manage and engage with vast networks of people. At a typical RIA firm, the average advisor manages anywhere from 50-100 clients and more experienced advisors can have client books with upwards of 500 contacts. Advisor networks are highly valuable, but they can also be difficult to manage and keep track of as they grow

For firms, advisor networks have huge potential for fueling client acquisition, business growth and new collaboration opportunities. However, many advisors struggle to organize and keep track of everyone in their network, let alone identify opportunities to strengthen those relationships. This is because many CRMs don’t cater to how complex these networks can be. 

The Directory helps advisors keep track of everyone in their network

To help advisors organize and make sense of their complex networks, Practifi provides every advisor with their own directory. The Directory is home to all of the advisor’s contacts including clients, prospects, attorneys, accountants, lending institutions and more. Multiple segments and definitions give advisors options as to how they can label everyone in their network. As a result, they can easily filter and find the types of contacts they’re looking for. For example, if an advisor wants to find all of the accountants or platinum clients in their network, they can use the Directory to find them quickly. Overall, Practifi makes it easier for advisors to keep track of contacts in their network which is the first step towards building more meaningful relationships with them.

2. Connecting dots in the client’s world

One reason managing networks is hard is that many clients come with a range of established relationships. Some are just getting started on their financial journey and don’t have any affiliations yet, whereas others have already built multiple professional relationships with trusted third parties. To provide the best client experience, advisors need to understand who’s who in the client’s world and ensure they work with them to produce the best outcome for the client.

Client relationships can include referrals, referrers, beneficiaries, attorneys, accountants, banks and more. And as firms grow and add more advisors and clients, keeping track of these relationships and connections becomes increasingly difficult.  No two clients are the same but industry-specific CRMs can make it easier for advisors to understand the various relationships clients have.

Visualizations make it easier to understand each client’s world

For example, in Practifi, advisors can assign relationship types between records, and these relationships are displayed visually — painting the picture of  who’s who in each client’s world. These visual diagrams clearly map out household members, referrals, entities (like funds and trusts), and other important relationships such as accountants and attorneys. Instead of flipping through notes or searching for Excel files, advisory teams can easily see their client’s world, understand the relationships and connect with them. As a result, advisors have a better understanding of their clients and know who to partner with to give them the best outcome and experience.

3. Identifying important influencers

Growth-oriented RIAs focused on increasing clients and assets recognize the value in building relationships with important influencers in the client’s network. Referrals are still one of the most effective ways advisors can bring in new business, however, research shows that few clients make referrals despite high satisfaction rates. And in practice, less than 5% of an advisor’s clients refer new business. Ambitious firms should not only consider how to improve client referrals but also make it easier for advisors to build relationships with business partners within their clients’ networks.

Both clients and business partners play an important role in referring business, however, not all referrers are as influential as others. Keeping track of every influencer and who they have referred can get complicated, but technology can help  growth-oriented firms do this.

Advisory teams can see the influence of each client and partner

Practifi enables advisors to easily see the influence of each client or partner. Once a referral has been made, a new record is automatically added to their Influence list. In the example above, Faulk Accounting has referred three clients to the firm. The advisor can also see the AUM and annual revenue generated from each referral.

Powerful and flexible, Practifi also allows firms to customize influencer segments. Firms may want to do this to make it easier for their teams to identify important influencers. These influencers can then be segmented in any number of ways — some common examples are by referred AUM, annual revenue or number of referrals. By tracking referrals in Practifi, advisory teams can see the influence of each client and business partner, increasing transparency and creating a better understanding of important relationships within the firm.

4. Strengthening referral partnerships

Did you know the nation’s top-performing firms have referral plans in place with their clients and business partners? And while it takes effort and time, research shows that firms who have a focused approach to referrals achieve stronger growth in this area compared to firms without them. Referrals are necessary to achieve long-term client and asset growth, but only firms that empower their teams to build these relationships will reap the benefits.

Many firms don’t have the technology in place that their teams need to identify influencers, let alone make it easy for advisors to strengthen those partnerships. If certain clients or business partners are driving a significant amount of referrals per year, it’s worth considering how to engage these individuals. A little recognition can go a long way. 

Advisors can easily engage important clients and partners in their network

Practifi helps firms do this by making it easier for advisors to not only identify important influencers in their network but also engage them. Whether it’s offering complementary sports tickets, a case of wine or an invite to the end-of-year golf outing, Practifi helps advisors reach out and recognize important clients and partners in their network. As a result, referral partnerships are strengthened over time.

Harness the power of your network

Hundreds of RIAs get their start each year, but only a few will rise to the top. These high-performing, growth-oriented firms not only empower their teams to service clients effectively but also provide the tools their teams need to grow the business organically.

Built for the needs of growing RIAs, Practifi helps advisors better understand their network, navigate their client’s world, identify important influencers and build stronger referral partnerships. As a result, firms can grow their client base organically and develop long-lasting relationships with important clients and partners. 

If you’re interested in learning how Practifi can help your firm harness the power of your network, contact us or request a demo today.

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