As I approach the end of my third year as an independent RIA, I am very glad to have made the decision to leave the security and culture of the banking and wirehouse world. When I reflect back to my first year of independence, there were many bumps in the road. Establishing an infrastructure, settin my pricing, and clearly defining my offerings were only a few of the items on my plate during that time. I also had to bring in new clients while balancing on a financial tightrope.
Yes, there were a lot of decisions to make that first year. After the end of my second year things were better, but my income was still not adequate. Today, current income is not only sufficient to meet our business and personal expenses, but there is also a small surplus. One of the next items on the agenda is to start a health savings plan. Then, in a year or two, I hope to have a full time assistant and a retirement plan. You have to crawl before you walk and walk before you run. I think I’m walking pretty well now. However, to accomplish this I will need a few more clients.
Fortunately, over the past few weeks, I’ve received three new referrals. Why? Partly because I’ve asked for them. As I go through the client review process, I am incorporating the question, “Do you know of anyone who could use the services I provide?” If they do, I give them some business cards and the rest is up to them. I have also created a tab in ACT! on which I keep a record of the referrals I receive. The tab includes the name of the referral, the date of the referral, the result of the referral, and whether I have sent a thank-you to the referring party.
Referrals are very important, especially if you don’t want to spend a lot of time with seminars or cold calling. Generating business from referrals allows you to spend more time serving clients and not ‘shaking the trees’ for new ones. All of my clients have come from referrals or people I have met over the years. Moreover, referrals are the best source for new clients. If your focus is on satisfying current clients you can be assured that your pipeline will always remain full.
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Hi Mike,
I have wanted to say thank you for sharing all of your experiences for quite some time. I have quietly followed your blog since late 2008 and have kept up ever since. I have followed your blog so closely for many reasons, chief among them is our similar your views are with mine. As your blog very clearly illustrates, there are many ups and downs to business ownership, whether it is technology issues, finding other businesses to work with or having all of the appropriate licenses and compliance in line – we share these ups and downs, too.
I am 25 years old, working towards my CFP certificate and started an RIA firm, Alinea Investments, LLC, last April (I have been in the financial business since 16). Since then, my partner and I have been through many ups and downs (imagine all of the decisions you have made in the past 3 years having two inputs). Your blog has been a source of inspiration and admiration. I wish you continued success and always look forward to reading your next post.
Best,
Ian Gray
Thanks Ian! I wish you the best!
Mike, your post underscores the importance of really focusing on your clients. Unlike so many advisors who constantly chase down new clients and forget about their existing clients. And miss out on referrals from these clients.
A tip for you to consider: Give your clients a referral tool.
You could combine various Forbes and Independent Advisor columns into a printed booklet. On the back of your business card, tout your position as a columnist for both magazines. And provide a call to action: “Call my office and request a free copy of my report, ….”
When they call you’ll collect their names and addresses and can send the report. Some may want to read it before setting up a 1st appointment.
My best,
Richard