Twelve Steps to Creating Constant Referrals

Twelve Steps to Creating Constant Referrals

The best way to generate constant referrals is by having “centers of influence” delivering qualified and interested prospects to you regularly.

It is a simple idea, and like so many other things which appear simple it requires thought, planning, and excellent execution to deliver the desired results.

A center-of-influence (COI) is an advocate for you and your business…but with a difference to your average referrer.  They are an advocate who is superbly positioned to introduce your ideal prospective clients on a regular basis because of their role, or influence.

The process of building the right sort of relationships with the right potential COI is usually lengthy, but incredibly worthwhile if done well, as just a few well-chosen COI’s can deliver virtually all the new prospective clients a financial adviser could need.

There is a process however to cultivating the right COI’s to constantly deliver great referrals.

The Process

Before you can begin to cultivate a COI you need to arrange your thoughts and be able to answer these three questions:

1.  Who are you targeting in the way of ideal clients?

2.  Why are you the best person for those clients to be dealing with?

3.  How can you demonstrate – or evidence – that you are the logical choice for a COI to use?

The next phase of the process is to plan the approach and the positioning.  You have to know:

4.  Who is the ideal COI (or COI’s) for your target market?

5.  How are you going to set up the initial approach professionally, and position the discussion?

6.  You must be able to provide solid rationale to the COI about why THEY should help YOU.  (Hint: focus on consumer benefits; professional process and standards; and ways of eliminating reputation risk for the COI)

7. Can you demonstrate your process and business methodology to the COI, so they can be confident in what you do, and how you do it?

8.  Do you have a strategy for ensuring that you are in turn enhancing the COI’s position or business?  Are you helping the influencer in return?

Related: Are Advisor Mergers or Acquisitions Worth It?

Finally, there must be a considered approach to ongoing execution if you want a regular stream of the right sort of referrals to keep coming from the COI.

9. How do you intend staying in touch, and building the depth and strength of the relationship with the COI?

10. How, and what, feedback will you provide to them?  (This is a crucial step that is often the single biggest barrier to a successful centre-of-influence relationship if it is not done appropriately and regularly.  Bear in mind the requirement to balance professional reputations, privacy/confidentiality issues, and the fundamental human need for reinforcement that a “transfer of trust” has been handled the right way).

11. Optional: Recognition & Reward.  It may not be necessary to provide recognition or reward to the COI, but then again, it might be.  It IS important though that you have considered it carefully, and have clear parameters as to what is appropriate and how you will manage any needs on the part of the COI for recognition or reward.

12.  NOT Optional: Are you prepared to make some serious effort, for as long as it takes, to position and build the right relationship with someone who can generate a constant flow of the right prospective clients for your business?

Anything less than a full effort from the outset to address all of these points for a prospective center-of-influence will result in disappointment – for everyone.  To make it work well though, all you have to do is think through, and then follow, the process.

Tony Vidler
Twitter Email

Tony Vidler is the expert in professional services on creating strong personal branding and target marketing positioning. Tony has been in financial services since 1990, ... Click for full bio

An Emerging Theme In Thematic Investing

An Emerging Theme In Thematic Investing

Exchange traded funds (ETFs) are popular vehicles for market participants looking to engage in thematic investing. Thematic investing looks to take advantage of future growth trends, including disruptive technologies. Given that forward-looking approach, stock-picking in the thematic universe is equally as hard, if not harder, than in traditional market segments.

Go back to the late 1990s, before the bursting of the Internet/technology bubble. Back then, investors stood an equal chance of selecting E-Toys over Amazon or some no longer in existence networking equipment maker over Cisco.

“History is littered with examples of prospering industries with no indication of which company will come to dominate the industry,” according to Nasdaq. “This suggests that successful thematic investing is more about selecting baskets of investments rather than single securities.”1

The ALPS Disruptive Technologies ETF (DTEC) provides basket exposure to a broad swath of thematic investments. DTEC features exposure to not just one or two emerging technologies, but 10 such themes on an equal-weight basis.

Disruptive Efficiency

The 10 themes represented in DTEC are as follows: 3D printing, clean energy, cloud computing, cybersecurity, data and analytics, fintech, healthcare innovation, Internet of Things (IoT), mobile payments and robotics and artificial intelligence (AI).

Generally speaking, fund issuers have been quick to respond to disruptive and transformative technologies, bringing products to market to tap these themes. Prior to DTEC coming to market late last year, there were ETFs devoted exclusively to cloud computing, cybersecurity, robotics and other themes featured in DTEC. However, few use the basket approach to themes employed by DTEC.

Related: Getting Paid to Play The Energy Patch

February, a rough month for U.S. stocks, highlighted the advantages of DTEC's multi-theme methodology. Seven of the 10 themes found in the fund finished the month lower, but DTEC was able to outperform the S&P 500 on a monthly basis.

Focusing on individual themes can be rewarding over the long-term, but not all investors have the risk tolerance for such a strategy. Consider this: the Indxx Global Robotics & Artificial Intelligence Thematic Index jumped more than 48% in 2017. That type of performance is enough to seduce many investors, but that same benchmark slipped 7.60% in February, generating monthly volatility of 34.10%.Said another way, that robotics and AI index's February slide was more than triple the loss experienced by DTEC during the month.

More Advantages

While it probably is not accurate to call the indexes devoted to individual disruptive themes “old,” many use old school weighting methodologies. For example, the two largest components in the ISE Cloud Computing Index are Netflix, Inc. (NFLX) and Inc. (AMZN). Only two members of the S&P 500 have larger market values than Amazon while Netflix currently has a larger market cap than Wal-Mart (WMT) and McDonald's (MCD).

Holdings subject ot change as of 12/31/17

For its part, DTEC not only equally weights its 10 disruptive themes, but its 100 components as well, potentially reducing single stock risk in the process. As the chart below confirms, equally weighting stocks is rewarding across sectors and market capitalization segments.

Past performance does not guarantee future results

Annualized returns for the past 10 years show seven of the 11 S&P 500 sectors, when equally weighted, outperform cap-weighted equivalents, according to S&P. Three of those seven sectors – financial services, healthcare and technology – are prominent parts of DTEC's roster.

1 Source: Nasdaq Dec. 28, 2015

2 Source: ETF Replay data


An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus which contain this and other information call 866.675.2639 or visit Read the prospectus carefully before investing.

An investment in the ALPS Disruptive Technologies ETF (DTEC) may be subject to substantially greater risk and volatility than investments in larger and more mature technology companies.

There is no assurance that the market developments and sector growth based upon the themes discussed in the article will come to pass.

ALPS Disruptive Technologies ETF shares are not individually redeemable. Investors buy and sell shares of the ALPS Disruptive Technologies ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 50,000 shares.

ALPS Advisors, Inc. (AAI) has engaged IRIS Werks, LLC (IRIS) to produce analysis and commentary on ALPS-advised ETFs. IRIS currently has a compensated business relationship with AAI. AAI is not affiliated with IRIS.

The content and opinions expressed in this article are that of the author and not the views and opinions of AAI.  In addition, AAI assumes no responsibility to ensure the accuracy of the content written by the author.

There are risks involved with investing in ETFs including the loss of money. Additional information regarding the risks of this investment is available in the prospectus. Past Performance is not indicative of future results.

The fund is new and has limited operating history.

ALPS Portfolio Solutions Distributor, Inc. is the distributor for the ALPS Disruptive Technologies ETF. AAI is affiliated with ALPS Portfolio Solutions Distributor, Inc.

The author is not an investment professional and this article should not be considered investment advice. While the information and statistical data contained herein are based on sources believed to be reliable, the author takes no responsibility to ensure the accuracy of the content. Additionally, this article should not be relied on or be the basis for an investment decision. Information that is historical is not indicative of future results, and subject to change.

S&P 500®: A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

S&P SmallCap 600®: A capitalization-weighted index that measures the small-cap segment of the U.S. equity market.

S&P MidCap 400®: A capitalization-weighted index that measures the mid-cap segment of the U.S. equity market.

Indxx Global Robotics & Artifical Intelligence Thematic Index: The Indxx Global Robotics & Artificial Intelligence Thematic Index is designed to track the performance of companies listed in developed markets that are expected to benefit from the increased adoption and utilization of robotics and Artificial Intelligence ("AI"), including companies involved in Industrial Robotics and Automation, Non-Industrial Robots, Artificial Intelligence and Unmanned Vehicles.

Tom Lydon
Twitter Email

IRIS Co-Founder and Editor and proprietor of Tom is a frequent contributor to major print, radio and television media including Forbes, The Wall Street Jou ... Click for full bio