When RIAs see their faster-growing peers boast more than double their prospect-to-client conversion rate, they naturally begin to ask, “What do I need to do to get to their level?”
of Herbers & Co. Services Market Growth Study. 2023 found that firms categorized as organic top producers close 7 out of 10 of their prospects, compared to the 30% conversion rate of an “average” consulting firm. These firms were found to offer additional services, such as business planning, cash flow and education, as well as property, health care, tax, insurance and retirement.
The importance of providing services beyond typical financial advice was similarly emphasized in a recent one AssetMark surveywho found that clients are more likely to leave their advisors when there is no depth of service. Undoubtedly, RIAs that succeed in driving organic growth offer a wide range of ancillary services such as insurance risk management, tax planning, wealth planning and more.
As firms race to the top of the extended services game, the key to success lies in mastering effective collaboration across all offerings to ensure the client receives comprehensive and thoughtful advice. Think of these services as different specialties within a high-end restaurant, where cultivating the restaurant experience is essential to their success. The individuals responsible for the wine, cheese, dessert, meat and sauces must rely on each other to achieve true synchronicity of flavors. Similarly, VNRs should ensure that everyone involved in the client's financial plan is in constant communication, fostering a genuine culture of collaboration.
Our industry is used to working as independent entities, but to provide clients with the best financial future, we must move to a partnership mentality that replaces a traditional vendor relationship. Just as a five-star restaurant can deliver a delightful experience by bringing together all the right flavors, a shared understanding between life insurance, estate planning and tax experts provides the collective high-level services that customers desire.
Partnership is synonymous with success
As in any relationship, it takes two to succeed. During my two decades in the industry, I have worked with RIAs of all sizes to integrate risk management assurance solutions into their core offerings. I've experienced the most effective relationships with RIA firms that offer us a seat at the planning table and invite us to join their client calls instead of letting us blend invisibly into the background. To support this, we have a thorough integration process that we repeat across firms, and we've seen our partners drive 2% to 4% organic growth in their first year of working with us.
Expanding this partnership means lining up with advisors and working as part of their team. All too often, we see advisors unsure of where to start when it comes to effectively integrating risk management into their overall practice. When we work together – and sit on the same side of the table – it makes it significantly easier to influence the end customer. As advisors look to add service partners to their work, it's critical to ask the right questions (How will we work together? What if my client has questions? How will we demonstrate the impact of our work?). It effectively lays the foundation for a strong relationship.
Customer experience matters to your partners too
It's possible to get so wrapped up in your growth strategy that your business loses sight of the customer relationships that actually fuel your growth. Putting the customer first means your service partner cares enough to put in the work. I believe that the most sought-after services, such as insurance planning, estate planning or tax planning, are too involved for specialists to act as principals. Building this type of relationship requires a high level of commitment and a team willing to step out of the “vendor” box to become an extension of the RIA. It is important to have an unbiased process that gives the advisor peace of mind that we are truly working in a partnership capacity rather than pushing a product for our own benefit.
To drive meaningful growth, all strategic partners must prioritize customer relationships by acting as a dedicated extension of their business. Their teams must be willing to collaborate with you and each other. offering a trust-focused and unbiased approach that truly supports the client's best interests.
Chad Druvenga is the CEO of CBS Brokerage.