Contrary to what many advisors assume, referrals do not automatically create new wealthy clients. Instead, research group Cerulli Associates notes that affluent investors use family and friends as sources in "the retail version of the request for proposal process common in institutional markets."

Once they make the initial contact with an advisor, wealthy investors assess a variety of factors to determine whether the advisor would be a good match, including reputation, quality of service, and fees, according to the latest quarterly issue of The Cerulli Edge-Advisor Edition. Only 11% of households cite referrals as the reason for beginning relationships with advisors, Cerulli says.

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