Asking for Referrals when Your Performance is Lagging

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Dear Bev,

My firm is very focused on client referrals right now. We are supposed to ask for them at client meetings. Our investment performance has not been great – we are behind our benchmarks. I think it is wrong to tell clients we have underperformed and then ask who they know that they could refer. Do you agree we should wait until our performance improves?

Name Withheld

Dear Financial Advisor,

This is precisely why asking for referrals at client meetings is such an ineffective way to generate referrals. Yes, I agree with you – if your strategy for referrals is to give clients bad news and then ask who else they know, it isn’t going to be very successful and could damage you.

One important question, though – in spite of your recent poor performance, do you think you are offering value to your clients? Do you believe that there are others with whom you deserve to work? If you don’t have the confidence that you are adding value in spite of a blip in performance, you can’t impart the confidence to anyone else.

Client referrals should be treated like any other business strategy. You need to have a process and ongoing commitment to gaining referrals that isn’t tied to market movements. You can’t just ask at the end of a meeting and expect that will suffice. You want to have a drip process with clients throughout the year. Send them information they can pass along. Have meetings outside of the annual performance process to talk about other issues, and share your interest with clients in growing the firm. Provide opportunities in the form of educational events, luncheons, etc. for clients to learn more about your philosophy and what you offer.

If you have been “selling” on performance, you want to look at this too. You won’t always be ahead of your benchmark and you don’t want to set expectations that all times are good times! Be sure your value-add and the offering you are giving clients is expanded far beyond just performance. You are in the investment business, so naturally performance is one critical component. But there should be many other aspects to the relationship.

Think about why clients hire you, the value you add and how you can help them talk about what you do to others. Tell a story about what it is like to work with you that isn’t just about beating benchmarks. And, make sure this is an ongoing process and not just a one-time, “Let’s get some referrals!”

Dear Bev,

I have an advisor who is always unhappy. No matter what we are doing, she complains to everyone. Other advisors are complaining to me about her attitude. I have tried to talk to her but she feels justified in her behavior. I am wondering whether hiring a coach to work with her could be effective.

Sam R

Dear Sam,

This is one of those questions that requires answering additional questions before I can answer it. What would your intention be in hiring a coach? Do you want to make her happy and send her a message that you care about her? Are you hoping the coach will change her attitude around to something positive? Does she have skill areas she needs to develop?

Often a manager will hire a coach to “fix” the person working for them. You want to be very clear what you would expect and what success would look like before you start talking to coaches. Define the desired outcome and what success would look like to you after a coach’s work is done.

Is she open to changes? If you bring in someone else, would she be willing to work with them? If she isn’t open to change you might encounter resistance that you need to overcome.

How much do you know about what’s going on with her? Do you know the root of her dissatisfaction? Have you talked with her about her attitude? Maybe something is going on outside of the firm or with a peer inside. Take time to explore what’s eating at her to understand the issues.

Is this new behavior? Has she always been like this? Some people, when under stress, get more outwardly angry and frustrated. She might have a natural tendency to act this way, so you could share some options for helping her deal with her stress. While you say you have talked with her, sometimes people don’t realize how their actions impact others.

I agree with you: Some sort of intervention is needed if this is disrupting the workplace overall but you need to be more certain of your desired outcome, and what’s really going on with this person before you take the step of hiring someone from outside to fix it.

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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