The power of your network: Tips on getting referrals

Are you looking to expand your book? Focus on revamping referrals!

I believe now is the best time we’ve had to gather referrals in the last 11 years. While we were in the bull market there was a perception among investors that it wasn’t hard to put together a winning portfolio. When investors feel secure there’s often the mentality that there’s little reason to change their approach. Yet investment selection—as pointed out in our 2020 Value of an Advisor Study—is just one part of an advisor’s value.

Skilled advisors spend the time getting to know their clients’ goals and understanding their life circumstances and investment preferences. This is time well-spent, because many of these clients may become your strongest advocates. Here’s how to connect with your top clients and start prospecting your own book.

Be direct

Stop being vague. I believe the biggest reason that advisors don’t get referrals is they don’t ask! Set a weekly goal and stick to it.

Avoid these common mistakes

Some of the don’ts:

  • Don’t – say give me names
  • Don’t – say who do you know that could use my services
  • Don’t – say let me tell you what to say
  • Don’t – ask a client to call while in the meeting
  • Don’t -- give your clients a pen and paper to write names down

What these strategies have in common is that they put the client in an uncomfortable situation. Some of these strategies may have worked in the past, but so does mowing a lawn with scissors. I believe advisors who successfully use referrals to drive new business are engaging clients who truly value their services.

Be specific!

The more specific you are, the more likely you’ll get a name. Use language such as: Do you know anyone who [pick an occupation, pick marital status, etc.]

A colleague of mine, Tim Halverson, recommends asking your best clients this question, Do you know anybody in your circle that may need to talk to me? 

The human brain is not wired to think of something specific when they are asked to think in general. Think of the referrals you have given in the past. The person asking had a specific problem: Do you know of a good auto body shop? Let the client know who you are looking for. That way, when the situation arises, you are top of mind!

Articulate the reward 

I believe the second-biggest reason advisors don’t get referrals is because clients may think there isn’t a significant reward for doing so. Or worse, clients are struggling to remember the value you have delivered in the short-term for goals that are decades away. If we don’t remind clients about all the ways in which we are helping them track to their outcomes, it’s easy for them to forget.

Remind them of the value you offer and be specific. Consider giving VIP service to those being referred, rather than inundating them with a blast of emails or hounding them with calls. This can help make clients feel more comfortable that you will provide the best experience for the individual being referred.

Plant the seed

This is the biggest tip and is a multi-step process, but ultimately this is what I would say.

You are one of my gold/A clients. I’ve built my business on helping people [be specific about their situation]. I want to know who you know, and I don’t expect it to happen overnight. I am going to earn the right through excellent service. Does that sound fair?

In three to six weeks, give the client a call, check in and see if they have thought of anyone that you can be introduced to. Reiterate the white glove treatment.

The bottom line

Be direct and leverage your network for referrals. Don’t underestimate the power of a financial advisor and the role you play in improving clients’ financial security.

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