Framing the Referral Discussion

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Beverly Flaxington

Last week, I was training a group of very successful Florida-based advisors who brought up what is a common issue with regard to client referrals. Even the best advisors, with the most satisfied clients, offering the highest levels of service often struggle with obtaining referrals.

Human behavior lies at the root of this problem. It has to do with how the advisor and the client think. Let’s look at some key areas of focus to increase your client referrals:

  1. Have a plan. Most advisors have vague or ill-defined goals with regard to generating referrals. They know they need more referrals, but they haven’t looked at how many they have been getting, whether they fit the ideal target profile or which clients “should be” referring. Start by setting clear goals.
  2. Turn clients into evangelists. Just because they like you, doesn’t mean they understand what you do for them and – more importantly – how to talk about it to others. Advisors have told me of hundreds of their clients over the years who have said, “I want to refer – but I don’t know how.” Make sure you arm them with information.
  3. Help them tell your story. In many firms, the partners or staff members don’t tell the same story when asked, “What do you do?” Think about the old-fashioned telephone game. Clients are a degree separated from the referral to whom they are telling their story. Be sure the story about what you do, and why it’s different, is clear, repeatable and easy for someone outside of the firm to tell.
  4. Guide them with what to look for with regard to referrals. Most advisors will say, “I tag it on the end of a meeting and ask them, ‘who else do you know that I should talk to?’” The problem with this is that our minds can’t grasp in the moment who that “someone else” should be. When a client leaves, they may forget about it. Be clear about the kind of people you help, the circumstances where you can best help clients and what you are able to do for them. Give the client a clear picture of who they could talk to on your behalf.
  5. Overcome your own negative attitude. One advisor told me it was “pushy” to ask for referrals. If you think about the referral process as only a way to grow your business, you may have negative feelings toward it and the clients may sense this. If you think about it as a situation where there are thousands of people who need what you do and every day that goes by that you aren’t helping them, they may not be getting the assistance they need… Then, it may become more of a mission for you!

Look at your client base and identify those who should be referring. Think about this list and ask yourself if there something you could do differently to increase referrals to people who need you.

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal,, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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