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The 10% Rule: The New Rule of Organic Growth

 
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Ray Sclafani, Founder & CEO of Clientwise, joins Emigrant Partners' Mark Bruno on this episode of RIA+ for some "real talk" about organic growth. More specifically, Ray and Mark discuss what meaningful organic growth targets should look like, how firms should be approaching growth from new and existing clients - and what technology is needed to supported consistent growth. 

Learn more about ClientWise here.

 

Summary


  • Firms should strip out capital market gains when calculating organic growth targets to focus on controllable factors. Instead, firms should focus on two tracks of organic growth: growth from existing clients (zoo hunting) and new client acquisition (jungle hunting). Ray suggests a 10% rule for new client acquisition, targeting 10% of existing assets or revenue from new clients annually, excluding market gains and M&A
  •  To maximize growth from existing clients (zoo hunting), firms need a dedicated "chief growth officer" to oversee opportunity management. This person should ensure every client interaction is followed up with potential opportunities, such as retirements, business sales, inheritances, or stock option exercises. Tracking these opportunities consistently over about three years helps firms understand the health of their business and identify growth potential 
  •  Referrals are a primary growth driver, especially for larger firms, but the best firms proactively partner with a select group of client advocates. Advisors should identify five to seven clients who appreciate the firm's value, want to help it grow, can articulate its value proposition, and have a strong, influential network. These advocates should be capable of making effective introductions, not just casual referrals 
  •  Firms should track the total relationship value of their best clients, which includes not just the fees they pay but also the value of the referrals they provide. Tracking this metric increases referral streams as teams pay more attention to the value provided by these advocates 
  • To properly recognize client advocates, firms should personalize their approach by understanding what motivates each family or individual. This could include private dinners with portfolio managers, introductions to relevant professionals like bankers for business sales, or donations to the client's favorite charity. Mentoring the client's children as they navigate job interviews is another personal and impactful gesture 
  •  As firms grow, they should consider hiring a chief growth officer to lead growth strategy and execution, especially around $10 million in revenue. This role becomes crucial as the founder's leadership responsibilities increase and the firm needs dedicated focus on rainmaking. The chief growth officer ensures activities with client advocates are scheduled and executed, and drives the overall growth strategy 
  •  The chief growth officer should create processes and infrastructure to support consistent execution and help advisors identify and capitalize on opportunities. This includes leveraging technology like CRM systems (e.g., HubSpot) to manage client interactions and track progress. Business development enablement is key, combining proactive work with loyal client advocates and digital marketing efforts to increase firm awareness 
  •  Marketing for wealth advising firms should become more specific, focusing on ideal client profiles rather than targeting all wealthy individuals. Firms should define their target market, niche, and ideal client persona characteristics, such as a willingness to pay for advice and engage the entire family. Specialization and expertise in specific client knowledge will differentiate firms in the future 
About Our Guest

ClientWise

Ray Sclafani, Founder & CEO

After 20 years at AllianceBernstein, Ray Sclafani founded and heads ClientWise, which provides elite coaching programs and consulting exclusively for the financial services industry. Ray’s passion for serving leaders, advisors, and companies in the financial services sector is reflected in ClientWise, its unique coaching programs, and its team of credentialed coaches.

Ray’s experience as a coaching and consulting specialist in the financial sector mirrors his long and profitable history in the industry. In his 20 years at AllianceBernstein, Ray was one of the company’s top sales professionals and executive leaders. He specialized in creating and executing highly successful sales plans and building long-lasting client connections.

Later, Ray used his expertise as founder and Managing Director of the Advisor Institute at AllianceBernstein. In that role, he developed and directed an extensive series of programs that created improved and sustainable motivation, sales, and client relationships. Ray completed his transition to founding ClientWise through significant coaching education and practice. As a complement to his coaching skills, he also holds a Master’s Certification in Neuro-Linguistics from the International Association for Neuro-Linguistic Programming and has participated in The Strategic Coach® Program for 17 years.

Ray’s expertise as an executive coach and trainer is recognized and sought out by leaders within the profession. Through ClientWise, he has provided coaching or created and presented workshops for, among others, Merrill Lynch, Morgan Stanley Wealth Management, LPL, Raymond James Financial, Ameriprise, and Northwestern Mutual. In addition, he has spoken on request to major industry conferences and company events for firms such as Merrill Lynch for their Diversity & Training programs, LPL, Morgan Stanley Institutes Conferences, Raymond James, FSC Securities, as well as the FPA National Conference, John Hancock Funds Wholesaler Conference, Nationwide Financial Summit Sales Conference, MetLife Presidents’ Conference, Northwestern Mutual Forum, Northwestern Mutual Annual Meeting, Barron’s Winner’s Circle Summit, and Barron’s Top Advisory Teams Summit.

He has been interviewed and quoted in the Wall Street Journal, Financial Planning magazine, and Registered Rep, to name a few. Ray’s book, “You’ve Been Framed: How to Reframe Your Wealth Management Business and Renew Client Relationships,” was published by Wiley in 2015.

Ray holds a BA from Baylor University and also holds a Professional Certified Coach (PCC) designation with the International Coaching Federation. He lives in Flower Mound, Texas with his wife and true life partner, Beth, and their two sons who continually inspire his work and his passion for excellence.