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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
Ray Sclafani (00:00.142)
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Welcome to building the billion dollar business, the podcast where we dive deep into the strategies, insights and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani and I'll be your host. Well, I've talked a great deal about organic growth. It's one of these topics that never gets old.
I want to hone in on new client acquisition for just a moment in today's episode. This organic growth obviously is a critical indicator of health for every successful advisory business, regardless of size, assets, revenue, or number of clients. It definitely reflects a team's ability to deepen relationships and bring in new ones. Growth isn't just a metric. It enables you to expand capability, increase capacity, and reinvest in delivering even greater value to clients over time.
So the purpose behind organic growth obviously is super duper clear. In our industry, growth can signify various things. For some firms, it's about increasing wallet share. For others, it's driven by a strong market when rising AUM is the focus. However, one of the clearest indicators for a firm's true growth health is its ability to consistently attract and onboard new client relationships. Acquiring new clients creates a repeatable, scalable growth cycle.
According to industry benchmarks, firms that consistently attract new households outperform their peers in revenue, enterprise value, and advisor productivity. Despite all that, most firms allocate less than 2 % of gross revenue for client acquisition, and many advisors spend less than 10 % of their time prospecting for new clients. If you want to drive your firm's next growth chapter,
Ray Sclafani (02:00.302)
I want to share with you six specific steps to boost organic growth. Number one, assess your current client roster. We all know the data. Loyal client advocates and referrals is the key driver of new client acquisition. So focus on those little client advocates. That's what we call them here at client wise. These are your most vocal supporters and connectors. You're raving fans. Deepen these relationships, encourage collaboration and show them how they can help others benefit from your services.
know the total relationship value of these clients who have sent the most referrals. We call this the TRV at ClientWise. Here's how you calculate the TRV. Add the current client annual revenue, what they pay you, plus the annual revenue of those whom they've had sent your team over the past three years. Adding that together will help identify your total relationship value. Firms that keep track of the TRV
have a significantly higher probability of focusing on the right referral sources. And third, plan for generational continuity. Understand what your clients and their heirs value most. Expand beyond investment advice into areas such as family dynamics, charitable planning, and impact investing. Use technology to stay connected and hire diverse next generation advisors that reflect the evolving face of wealth. So that's number one, assess the current client roster. Number two,
Develop expertise in new business development. Not all advisors are natural rainmakers. Identify who best hunts external networking for new clients who best hunts by developing internal referrals and wallet share expansion and who thrives at closing and onboarding new prospective clients. It takes an entire team to succeed at organic growth. Let go of the eat what you kill model of growth. It's outdated. The best teams hunt in packs.
and divide the responsibilities related to organic growth and structure your team accordingly, dedicate roles for lead gen, lead nurturing and relationship management. Those are all different skills. Not everybody is great at wearing all of those hats and some team members are better at wearing some hats than others. For example, if you've got somebody that's great at lead generation, but closing and winning the new client relationship and onboarding them isn't their strong suit, we'll bifurcate the roles.
Ray Sclafani (04:27.894)
solve the most important mystery of all, how to institutionalize lead generation. So you can provide qualified leads to the advisors in your firm who know how to win new clients and serve existing clients more effectively. Train your team on the fundamentals of business development. If acquiring new clients as a goal, then dedicate time and energy to it. It just isn't going to happen magically. So that's number two.
develop expertise in business development and think how to institutionalize your lead generation. Number three, create a more focused marketing plan. Kate Healy is our fractional chief marketing officer, and she's been helping us with a focused marketing strategy. And what we notice is over time, about every three years, you want to redefine your value proposition as a team. Align your messaging with the real and emerging needs of the ideal client.
and the personas that you seek to target. Every three years, you're enhancing capability or expanding capacity. Certainly here at ClientWise, we've observed that. And so there's a re-imagination and an understanding of what are the shifting needs of the clients with whom you intend to serve. Emphasize your distinct specialties and areas of differentiation. Clients are looking for greater value, not just a portfolio manager. Present this positioning consistently across your digital presence,
content strategy and event participation. Ensure that every professional on your team is singing from the same hymnbook, so to speak, and using consistent language. Number four, utilize your CRM for identifying opportunities. I am shocked how many firms do not have a clear structure for tagging leads, converting leads in the CRM, and then tracking those leads that convert to opportunities.
and knowing how much time in the pipeline they're spending before they become a current client, understanding who their heirs are and whether or not you've got relationships with them. mean, just maximization of CRM alone is a real lift for firms that dig into that. Create a report of these outstanding opportunities and review them, create a report of these outstanding opportunities and review them bi-weekly at the very least. Most teams rely on each advisor to individually track their own opportunities
Ray Sclafani (06:47.904)
And while that sometimes works, you don't want opportunities slipping through the cracks. Add services like estate planning or liquidity event preparation so that you can deepen the household wallet share. Contact future inheritors directly and understand their values and engage them with technology enabled episodic advice. that's whole CRMPs is a major opportunity for so many teams. Number five, set intentional goals for new client growth.
Understand how many new clients your team has on boarded over the last 12 months. Analyze what's working and what's not to refine your acquisition approach. By the way, if you're listening to this episode and you're like, you know, a new clients are coming in. We don't really have a new client acquisition challenge around here. but you do. I was sitting with a team at a strategic planning session recently and they were lamenting over these capacity constraints that their business was growing and they just didn't have enough resources to serve and
the existing clients and meet the promises that they were making. And I asked them, well, how many new clients have you brought in over the past 12 months? And like every head turned, they weren't exactly sure they paused. And then somebody jumped onto the CRM, pulled it up and it was a really big number. Well, no wonder they were stressed. So by setting intentional goals for new client acquisition growth, you can actually manage capacity and meet the needs of existing clients. So there's a whole good reason to focus on this new client acquisition, even if it's just
to make sure you have the capacity and you've got the capability to deliver for existing clients. I would also build a five year forecast for new client acquisition growth and the revenue per client grounded in your ideal client persona. Use this to model future capacity and then structure the team needs accordingly. The team I was just talking to because they haven't set new client acquisition goals and weren't really measuring over the past three years, well, they were finding themselves in this constraint. So,
planning ahead really does matter. And number six, reframe your entire culture as an organization and team around growth. Make client acquisition part of your team culture, not just a hope, but an expectation. It isn't just about client acquisition for client acquisition's sake, it's about strategic impact. Growing your impact means that your purpose, why you're in business, is expanding as well.
Ray Sclafani (09:12.566)
I would celebrate those successes, share effective strategies with each other, evaluate what's working, what isn't, run a keep, stop, start exercise, what's working in our culture around growth, what's not working, and what should we start doing new related to developing a culture around growth, and encourage all team members, regardless of their roles, to view themselves as ambassadors for the firm's growth. Here's the bottom line.
If your firm's future depends on continued growth, it does, firms that are focused on continued growth attract talent more quickly. You'll notice that not only attracting new clients will happen more quickly, but you'll also attract young professionals and the next generation leaders because they're attracted to firms that are growing. This whole concept is essential if you're developing your talent roster. Firms that seriously take the six steps that I outlined here,
are the ones creating a self-sustaining scalable growth cycle. The opportunity is there. We know the wealth transfer, the demand for advice, the declining number of advisors in the profession. You there's a clear opportunity here and now's the time to act. With each of our episodes, we always include a few of these coaching questions. Today, I'm gonna introduce four. Number one, which step in our client acquisition process requires the most attention right now?
And why? That means you've identified and outlined your client acquisition process. That's key. Number two, who on your team consistently contributes to growth and how can we better align roles with their strengths? Number three, what is one change we could implement in our marketing or messaging right now that would resonate more with next generation clients? And number four, how might we better define and measure organic growth in ways
that reflect the future we wanna build for the firm. These coaching questions should be self-reflective. They should be coaching questions that you share with your leadership team. And if you're doing any strategic planning for the upcoming year and the year ahead, you definitely wanna spend some time asking yourself, what are we doing to fuel organic growth? If you enjoyed today's episode, please share it with somebody. Tag us as a five-star review, we'd appreciate that. And thanks so much for listening.
Ray Sclafani (11:35.662)
Well, thanks for tuning in. And that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing and striving for greatness. Together, we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode and article.