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Client referrals are oxygen to financial advisors who choose to grow their practice organically. One would think that in a high-trust profession, client referrals would be a natural source of sustained new business. Without client referrals, many firms would simply shrivel up. Yet, as a referral coach for financial advisors, I’ve experienced that in too many cases, a genuine client referral process doesn’t exist. If one does exist, it’s often unfocused and disconnected from all other marketing efforts.
For many advisors, asking clients for referrals remains a messy, uncomfortable situation.
The result is an episodic, unorganized referral effort that is pushed onto the client at the end of their review meeting. Nearly every advisor I speak to uses this same approach for asking clients for referrals. The tactic must have begun a long time ago and continues to be passed down through the ranks because, “this is how we do it” or “this is how I did it and it worked for me.”
Okay, so let’s get real.
Perhaps this approach has worked for some people. The consensus was, “Why not ask the client for referrals while I have them in front of me? Right?” Sure, it’s possible that a client will cough up a name or give a phone number or two. However, advisors admit to me that it feels horrible, it makes the client squirm and even if they do get a name or number, it never amounts to much. Not to mention, isn’t a client review meeting supposed to be focused on the client? There’s a better way to go about it that is more in alignment with your relationship-focused practice.
Imagine how much better it would be to shift from making a 10-second request at the end of a review meeting to arranging a dedicated referral conversation with your client over a cup of coffee or lunch. When you make the choice to give client referrals the full attention they deserve, you’ll see the results you want. I can tell you for certain that you have loads of clients who want to refer you, but can’t recognize the signals or don’t know how to bring you up in the conversation. The solution is education, accompanied with a mind-shift. Instead of focusing on asking for referrals, focus on teaching your clients how to refer you.
Ask your favorite clients to meet you for coffee/lunch. Tell them you’re looking to grow your practice this year by finding more clients just like them and that they might be able to help you. Ask if you can share some information with them. Meeting with your favorite clients like this to specifically educate them on how to refer you empowers them to be successful and gives them a new lens to help recognize the opportunities for you.
My clients who have proactively engaged their clients in these conversations and have used my system for this approach regularly have clients thinking of people they know who need their services. One client, Leah, told me that one discussion resulted in a client thinking of a group of women that she wanted to get Leah in front of as a speaker. Leah has known this client for decades and never had this group of women ever come to mind before. Another client, Rich, practiced the conversation with his wife first and that led to her thinking of multiple people she needed to speak to about her husband. And yet another client, Chris, has successfully closed numerous next-gen clients for her firm from spending this one-to-one referral time with her top-tier clients.
Education actively engages your best clients to refer you successfully, while you get to spend quality relationship time with them. It’s proven to work way better than asking for referrals during your client review meetings.
Michelle R. Donovan is a speaker and co-owner of Productivity Uncorked LLC , a coaching firm that helps financial advisors enhance their productivity and create organic referral processes. She has written a Wall Street Journal Best Selling book, The 29% Solution (published in seven languages) and an Amazon Best Selling book, A Woman’s Way: Empowering Female Financial Advisors to Authentically Lead and Flourish in a Man’s World. She can be reached at [email protected].
Read more articles by Michelle R. Donovan