How Advisors Expand Their Business Through Centers of Influence

Centers of influence can help you grow your business if you’re making professional connections that lead to more referrals. Centers of influence marketing is something 62% of advisors rely on for referral generation, according to a 2024 Kitces report on how financial planners market their services.¹ If you’re not utilizing this strategy yet, you may be missing opportunities to expand your visibility and scale your advisory business.

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Understanding Centers of Influence for Advisors

Centers of influence represent professional relationships that exist between advisors and other individuals who have connections to the financial services space. Individuals in these networks are in a position to provide referrals to other members. The types of professionals that advisors may have in their circle include accountants, attorneys, mortgage brokers and insurance brokers or agents.

Referrals move both ways and these arrangements are built on mutual trust and understanding. For example, you might refer a client who needs tax planning help to a certified public accountant (CPA) in your network, while an attorney you know may send their client to you for help with creating a post-divorce financial plan.

How well do centers of influence work as a marketing tool? Here are some key data points from the Kitces report.

Client referrals remain the most widely used marketing strategy among advisors polled in the report, with 88% reporting that they rely on them for lead generation. The success rate for client referrals is slightly higher, at 95%, but the average revenue per new client is the same and the average aggregate CAC is slightly higher as well.

In other words, centers of influence can be an effective way to market your business if you’re building connections with the right people. Compared to other marketing strategies, such as email marketing and digital ads, relying on referrals from professionals in your network can also be a cost-effective way to increase your business footprint.

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How Advisors Can Use Centers of Influence to Grow

If you’re new to this marketing approach, you may have questions about how to get started. It’s important to remember this strategy is built on relationships and reciprocity. You can’t expect to receive referrals from other professionals without providing a few yourself. Additionally, the people you connect with through centers of influence need to have a good reason to refer you to their clients.

With that in mind, here are some tips for using centers of influence to grow.

1. Define Your Niche and Unique Value Proposition

Centers of influence are most effective when they bring you into contact with professionals who serve the same type of clients as you. So, consider your niche or target market and what makes your business stand out from the competition.

Specificity matters. For example, if you specialize in retirement planning, consider exactly who you want to serve. You may cater to physicians who are building wealth, military veterans who are ready to retire or women who are navigating financial planning solo. Thinking in these terms can help you identify connections that may prove most valuable for generating referrals.

Also, think about what you bring to the table. This goes back to the question of why someone should refer their clients to you. Your firm’s mission and values, as well as your expertise and service offerings, can influence whether someone is willing to send a client your way.

2. Identify Suitable Partners

When establishing partnerships as an advisor, the quality of those connections matters. If you’re specifically interested in using centers of influence to gain more referrals, it’s important to understand who is most likely to help further that goal.

If you know your niche well, consider what other types of professionals your ideal clients may use for financial services. For example, if you work primarily with high-net-worth clients or individuals who run their own business, they may have a CPA or team of accountants on standby to handle tax services.

The key is to look for professionals who offer similar but non-competing services. You have the best odds of gaining referrals from centers of influence when you can fill gaps in service that they don’t cover.

Look within your current network to consider who may be a good fit as a center of influence. Then, consider casting the net wider to include professional organizations for advisors, local business organizations and online communities for financial professionals. You may also look into building partnerships with financial influencers who have a following that reflects your target audience.

3. Take Time to Nurture Relationships

Centers of influence marketing tends to function best when there’s mutual trust and respect among the various professionals who are connected. Making a dedicated effort to build trust can lead to stronger relationships and potentially more referrals over time.

Developing rapport through shared interests can demonstrate appreciation for a COI on a personal level. Remembering key milestones, such as the anniversary of the day they launched their business or their birthday, enables you to express your appreciation in a meaningful way.

Another way to approach the nurturing stage of the relationship is to treat COIs the same way you treat your clients. If you consistently provide a superior client experience, consider how you can apply those same principles and practices to the relationships you have with COIs.

4. Educate COIs About What You Do

A center of influence may be more inclined to refer a client to you when they fully understand what your business does and who it serves. So while you’re in the relationship-building phase, consider what information about your business a COI would be most likely to find relevant.

Of course, it’s also important to understand what your COI does, including the services they offer, the types of clients they serve and perhaps most importantly, how they treat them. A COI relationship may yield few benefits if the person who makes referrals has a dissatisfied client base themselves.

Additionally, you may want to discuss your business goals and expectations to make sure they’re in alignment. For example, if you have a specific growth goal or number of leads you’d like to generate monthly, it may be helpful to communicate that to your COI. Likewise, you should understand what they hope to achieve for their business going forward. This type of open communication can help to avoid misunderstandings.

5. Reciprocate and Show Up for Referrals

At the core of a center of influence relationship is a belief in reciprocity. Someone refers a client to you, and you refer one of your clients to them. There are no specific rules about how many referrals you should offer. However, it doesn’t hurt to be proactive in sending referrals, at least in the initial stages of relationship-building. And the more clearly you’ve communicated your value and expertise, the more likely you are to receive referrals in return.

When a center of influence refers a client to you, don’t let the opportunity slip through your fingers. Show up for referrals the same way you show up for your current clients. Take time to learn more about them and their financial planning needs to determine if you’re the best person to help them. Disclose your relationship with the COI who referred them, and any potential conflicts of interest that may exist.

Communicate clearly and respond to their calls, texts or emails promptly. Transparently answer any questions they may have about what you do, and prepare some responses to common objections you may hear, such as “I already have an advisor.” The more prepared you are beforehand, the better your odds may be of converting a referred prospect to a client.

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Bottom Line

Center of influence marketing can open you up to new opportunities to connect with potential clients. In the Kitces report, referrals from centers of influence proved to be most valuable in terms of revenue generated, tied with referrals from clients. Adding this tactic to your marketing plan could give your business a significant advantage as you pursue sustainable growth.

Tips for Improving Advisor Marketing

• Digital marketing is only one way to bring in new potential clients. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• If you’d like to generate more referrals from clients there are a few ways to go about it. You may offer a strong referral program, for instance, that incentivizes clients to refer friends and family to you. Or you could show your appreciation through client events to encourage referrals organically. If you’re not getting as many referrals as you’d like, consider having your clients complete an anonymous experience survey to share their views on working with you and use the feedback they provide to find areas for improvement.

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