Newly minted advisors often assume that if they do great work, clients will come. They soon realize it doesn’t always work that way.
Your superior technical know-how, coupled with a commitment to integrity, will not guarantee a thriving practice. People still need to find out about you.
One of the core lessons that successful advisors learn is that marketing efforts alone — from advertising to leading public seminars — are only one piece of the puzzle. They also need to network in a range of formal and informal settings.
“Networking has always played a big role in building my practice,” said Fritz Miller, a certified financial planner in Pasadena, Calif. “Even at this more advanced stage of my career, it still has a big impact.”
Miller entered the business in 1985. He has found that effective use of networking helps him attract clients in his target market as well as cultivate relationships with supportive peers and other professional service providers.
Like many advisors, Miller has derived particular value from mingling with others who share a common bond. Networking tends to flow more naturally and produces better results when you’re among a group with a similar background or interest.
A graduate of University of California, Los Angeles, Miller regularly participates in college alumni gatherings. During monthly meetings of his local “Bruin Professionals” chapter, he socializes with other UCLA alums.
As an outgrowth of these meetings, Miller attends breakfast sessions with a handful of UCLA grads in related fields. These smaller groups enable participants to get to know each other — and their businesses — in more depth.
Help Others First
Miller looks forward to these events and sees them as more than an attempt to generate potential clients.
“The fact we have something in common makes it more enjoyable,” he said. “You’re not just talking about asking for new business. It’s as much social as anything else.”
Separately, Miller’s firm hosts quarterly activities such as wine tastings. The firm, Signature Estate & Investment Advisors, invites professionals who work with financial planners such as accountants, estate planning attorneys and mortgage brokers.
“Nobody is passing around business cards aggressively,” he said. “It’s a quasi-social group where 12 to 14 people might show up, get to know each other better and have a good time.”
From experience, Miller has learned to set realistic expectations for networking. If you demand instant gratification, you’ll probably face disappointment.
“You have to be willing to help others first before you expect business to come your way,” he said. “I’ve been doing this for five years, and only in the last two years has it led to business.”
Camaraderie counts as well. It’s easy to feel kinship when you’re surrounded with alumni from your alma mater. But even if you don’t share anything in common, it’s important to seek out friendly, engaging personalities.
“You have to like the people that you’re networking with,” Miller said. “You won’t pass on the name of a good client to somebody you don’t like or don’t trust.”
Miller’s “help others first” philosophy taps a critical element of effective networking. In his seminal 1984 book, “Influence: The Psychology of Persuasion,” author Robert Cialdini identifies reciprocity as a key principle to win over others.
Pouncing on opportunities to offer assistance creates a win-win dynamic because people often feel driven to return a favor. Others gain from your help — from giving them a hot lead to offering a free resource — and you gain by putting yourself in a stronger position to receive a favor from them down the line.
Another key to maximize networking involves diligent preparation. If you know in advance the people you will meet, you can think of ways to empathize with them and launch a stimulating conversation.
Rusty Vanneman, chief investment officer at CLS Investments in Omaha, Neb., attests to the power of preparing to network. He often meets with advisors to discuss their investment strategies.
“A lot of it is whether they will be comfortable with you in the first place,” he said. “You don’t want a mismatch upfront. We need to do our work ahead of time” to make sure networking pays off.
The questions you ask to launch a conversation can largely determine whether you will build rapport. When meeting advisors, Vanneman likes to inquire about their money-management and investment philosophy. He also might say, “Tell me about your clients. What do they want? What are they looking for?”
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