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I’ve been helping financial advisors get more and better referrals for 20 years. Throughout this time, advisors have not changed much as they continue their quest for the holy grail of referrals. Many want a bag of fairy dust that they can sprinkle on their client’s head to anoint them with the power to refer.
There are ways to expedite a referral process. But everything is contingent upon the depth of the relationship and relationships take time to develop. They require nurturing and an investment of time, energy and strategy.
I’ve been asked many, many questions about referrals from advisors all over the country. This article has the most popular questions I’ve heard time and again, followed by my response. Of course, there’s much more that can be said for each of these topics. That’s why you’ll see links to many of my other articles for Advisor Perspectives. If you wish to discuss any of these further, my contact information is below.
Here we go!
Q: If my clients love me so much, why don’t they refer me?
A: Having clients who love you creates a solid foundation for client referrals. However, it’s been proven that clients don’t refer for several reasons. Most clients don’t understand who or what you’re looking for, so they can’t recognize an opportunity for you. Even if they can recognize an opportunity, many struggle with knowing what to say and how to bring you up in conversation. The good thing is, this can all change and dramatically improve through educating your clients on how to refer you. Read more about this topic in my article, The Three Biggest Mistakes Advisors Make with Referrals.
Q: How do I handle a bad referral?
A: There are some who will read this question and say to themselves, no referral is bad! But I get it. The immediate thing to realize here is that you have a person who is willing to refer you. That’s awesome! However, it’s possible that they do not have a clear understanding of what you want. (See the question above.) I’ve often coached my clients to find another advisor or source who is more than happy to serve the prospect. By doing so, you show your referral source that you have a viable network of resources able to help them and the people that matter to them. You should then follow-up with your referral source to help them understand why that person is not a good fit for you and who truly is.
Q: What can I do to get more referrals from my centers-of-influence (COIs)?
A: This is always a loaded question because there are many factors playing into a lack of referrals from a COI. For example, the advisor may be mistakenly spending time with someone who is never going to refer. I’ve seen it happen. The advisor may not be spending enough time with a COI causing them to never be top of mind. COI referrals happen when you nurture the relationship by staying visible, helpful and relevant to them. COIs refer when they know how to refer you and clearly understand who you want. When COIs are confused, forgotten or taken for granted, you can kiss their referrals goodbye. And above all, applying a strategic referral process to the relationship will nearly guarantee referral reciprocity with the right person. Read more about this topic in my article, Why COIs Don’t Refer You.
Q: What do I have to do to get better referrals?
A: Believe it or not, low-quality referrals are often a result of your actions. In many cases, you unknowingly gave a clear message that you will work with anyone. Perhaps your website content is very general and ordinary, which will appeal to people who may not be ideal for you. Perhaps you say something like, “We only will accept assets above $2 million or more,” but your actions say another when you accept a referral that has $500,000. Perhaps there’s something holding you back from being assertive, making it widely known who you prefer to serve and building a brand to support that. Getting better referrals all starts with you. You need to be clear and consistent with your words and actions. Read more about this topic in my article, Eight Tips for Getting Better Referrals.
Q: What’s the best way to ask for a referral?
A: There is no cookie-cutter response to this question. Every advisor is different. A strategy that might work for one person may not work or feel comfortable for someone else. Some people never feel comfortable asking directly while others are fine with it. Asking for referrals at the end of a client review meeting is totally inappropriate, since this meeting is intended to be and should remain all about the client. Many of your referral problems can be solved with educating your referral sources. When you focus more on education, you focus less on selling/asking. This tends to be a lot more comfortable. Read more about this topic in my article, Four Ways to Influence Referrals for Those Who Hate to Ask.
Q: How do I get more referrals from my networking group?
A: If you believe that all you need to do is show up and make friends for referrals to happen, I have news for you. Showing up and making friends is necessary, but it’s only the beginning. If you expect to get referrals from this group of people, you need to treat them like genuine COIs. You need to be an exceptional giver of referrals, make a commitment of time and energy to the relationships, and regularly teach people how to refer you effectively. For more on this topic, check out my Wall Street Journal best-selling book on the topic, The 29% Solution.
If you have other referral questions that you'd like me to answer for you in a future article, email me or let's schedule a time to talk .
Michelle R. Donovan owns Productivity Uncorked LLC where they help financial advisors to be more productive and be more profitable. Their new online course The Profitable Productivity Plan for Female Financial Advisors is now available. Michelle’s books have become Wall Street Journal best-sellers, Amazon best-sellers and published in seven languages. Set a time to chat with Michelle, email Michelle at [email protected] and connect with her on LinkedIn.
Read more articles by Michelle R. Donovan
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
