Artificial intelligence (AI) has penetrated several industries, with the latest being wealth management. WealthReach, an organic growth technology firm, is leveraging AI to help financial advisors tap into the industry’s most traditional source of new clients – referrals. The company believes that AI tools can facilitate advisors in effectively asking their clients for referrals.
Introducing Multiply: The AI-Powered Referral Tool
Last month, WealthReach launched an AI-based tool named Multiply. The technology is designed on Dan Allison’s “feedback marketing” method, a renowned industry consultant. This AI agent aims to coach advisors on how to ask clients for referrals effectively. The service is priced at $150 per month for each user, but discounted rates are offered when it is bundled with the firm’s other tools, Attract and Convert.
The Significance of Referrals in Wealth Management
Despite the industry’s increasing focus on business expansion beyond asset appreciation, traditional referrals remain a significant driver of growth. Referrals bring in new customers and strengthen existing relationships. A survey conducted as part of Financial Planning’s March Financial Advisor Confidence Outlook study revealed that 62% of advisors rated referrals as their top source of new clients. This is almost three times the next-largest share who chose recommendations from certified public accountants or other professionals.
However, getting these valuable referrals requires more than asking clients for their contact information, says Michael Barrasso, the co-founder and CEO of WealthReach. He believes the issue is not that advisors are not asking for referrals, but rather, they do not know how to do it effectively.
How AI Tools Can Serve as a Recruiting Edge
According to Trey Prescott, director of business development with Atlanta-based RIA platform Advisory Services Network, advisors’ interest in learning strategies and resources for organic growth is turning such training into a differentiator for wealth management companies seeking to recruit them. The company has reached more than 200 offices and nearly 260 advisors with over $11 billion in client assets by providing services that include 60 practice management training calls each year, several of which focus on referrals.
The WealthReach Approach
WealthReach is addressing this need with their AI-powered tools that collectively assist RIAs and other advisory practices in web and AI searches, personalized and compliant communication with prospects, and generating referrals through Multiply. The company developed this tool after acquiring the intellectual property of Model FA earlier in April, a marketing, coaching, and growth firm where WealthReach’s other co-founder, David DeCelle, was the CEO.
Organic Growth Revolution: The Book on Referrals
In March, DeCelle and Allison published a book titled “Organic Growth Revolution: A Systematic Approach for Financial Advisors,” where they underscored the importance of referrals in wealth management. The book revealed that despite many clients expressing their openness to referring new customers to their advisors, the majority do not actually do so. This disconnect, according to Barrasso, stems from a lack of technology infrastructure and practice training.
A Proven Methodology
The tools available to advisors include identifying ideal clients likely to refer friends and family, educating them about the range of services provided by the firm, setting up joint meetings with the customer and the prospect, and analyzing possible missed referral opportunities through meeting transcripts. Barrasso assures that the tool is based on a proven methodology, stating, “We’re not just building a referral module and hoping it works.”
AI tools can be instrumental in helping advisors navigate the referral process more effectively and efficiently, ultimately driving growth in the wealth management sector. As technology continues to evolve, it’s likely that we will see more innovative solutions that enhance the financial industry’s operations and customer service.
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