Forget Client Referrals. How Advisors Are Building a ‘Circle of Influence’ Instead

Put in a good word for me, will ya?

Mergers and acquisitions in the wealth management space are as hot as ever, but organic growth remains the gold standard. Nearly 55% of referrals are clients telling their friends and family about their advisor, according to a recent Cerulli report. But “circle of influence” referrals from other professionals such as attorneys and accountants are steadily gaining ground. They accounted for 14% of referrals last year, up from 12.5% in 2021, the first year Cerulli tracked the data. As advisors expand into more services such as tax and estate planning, it is becoming growingly important to build strong professional networks.

“Advisors with strong professional relationships with [circles of influence] will be well-positioned to expand their client base as client needs grow more complex and as comprehensive financial planning becomes increasingly common,” said Noah Serianni, a Cerulli research analyst.

How’s Your Short Game?

One of the most effective ways to connect with other professionals is through shared interests like sports, wine or the arts, advisors said in the survey. Business on the golf course may sound cliché, but clichés stick for a reason. “Spending three to five hours together, plus food and drinks after, creates real connection,” said Joon Um, a CFP with Secure Tax & Accounting. “You don’t get that from a quick coffee or Zoom call. It’s not about pitching. Phones are away, no one’s rushed and trust builds naturally.” 

But, not every referral partnership starts with formal networking. Some advisors bypass the links and drinks, and simply send clients to professionals they trust. “Some of our best referral partners I barely network with, maybe once a year,” said Dinon Hughes, a CFP with the Nvest Group. “The relationship being built on mutual respect is much more important for us than referring to someone we play golf with.”

Internet, eh? Traditional marketing and online outreach still represents a small slice of new-client acquisition overall, but for some firms, it’s a major growth driver. Daniel Lash, a CFP with VLP Financial Partners, said roughly 40% of his firm’s new business comes from social media and digital marketing across platforms like LinkedIn, Facebook and Instagram. “We have a podcast, and getting Google reviews helps significantly with coming up more in Google and AI searches,” he told Advisor Upside. “A great website that is regularly updated is helpful as well.”