1. How well do you know the client (your best referral
source) or other person you are asking? Is their
personal or professional brand a sound one?
2. Aside from the business opportunities you may offer, do
they truly like and respect you? Is the feeling mutual?
3. What are the chances that they will take the time
required to refer you to the right person?
How to set up a referral process
Client surveys are good ways to encourage your clients to
think about the quality of their investing experience with you. They
are also a good way to introduce the topic of referrals.
You might consider a Mail Chimp survey, which is easy to
deploy and flexible. If you keep it short, chances are your clients will
happily complete it and appreciate your interest in their feedback,
which can benefit them as much as you. At the conclusion of the
survey, you might ask, “Would you consider referring me to a family
member, client or colleague who you feel could benefit from my
expertise?” Or: “My commitment as an investment professional is
to help people to reach their financial goals. If you have a family
member, friend or colleague who you feel could benefit from a
conversation with me about their investments, I would be pleased
to speak with them – without obligation.”
You will not only gain useful information that could help
your business but the act of completing your survey may get
them thinking about sending you referrals. Although it may seem
uncomfortable, this will grow your business faster than using a
more passive approach. By placing value on the client experience
you provide, your existing clients are reminded you are there to
help them. It also reaffirms your confidence in your abilities.
When to ask
Timing is indeed everything. If a person is planning to refer
you, he or she will probably come right out with it and ask if you
would be interested in meeting one or several prospective clients.
This is ideal, assuming the referrals are qualified and therefore
A client who has called to thank you for guiding them to a good
investment opportunity will be more likely to respond favourably
than one who has yet to benefit from your association with you.
In the former case, consider saying, “I appreciate your call and
your confidence in me and my team. Should you have a relative
or colleague who you feel could benefit from a conversation with
me, I would be delighted to meet with them, with no obligation
of course. They might wish a second opinion on their current
Christine, a 20-year industry veteran who manages in excess
of $120 million in assets agrees. She notes that while asking for
referrals has always come easily, “it is easier when I have done an
exceptional job for a client. They can sense my enthusiasm, but not
arrogance, and usually say, “Yes.” It’s important to never assume
that I will be referred and that I am owed a referral, regardless of
how good a job I have done for a client. Much depends on what
sort of a day they are having and if they have the time.”
She has recently become more selective as she finds
approaching people she does not know well can be time
consuming and draining. Christine would often end up hosting
annoying “tire kicking sessions” or “fee bazars” sessions without
the remotest guarantee of winning business. “No one leaves
happy. The prospect did not get the fee break they wanted and
you have just wasted your precious time.”
She adds, “When you reach out to clients you know well and
say you’d like to work with people like them, they feel flattered.
And they can become good screens or watchdogs who save you
time and effort.”
How can newer investors professionals win referrals?
Advisors who are starting out usually have little choice but to
approach everyone within their circle, even if they are not qualified
prospects. Phil began to build his business immediately after
joining the industry through referrals that came from university
classmates, his dentist, lawyer and anyone else with whom he
had built trust.
Newer advisors tend to rely heavily on the strength of
their “likeability” and their professionalism when building new
relationships that may eventually translate into new clients. You
must quickly differentiate yourself from the pack, whether you are
running a luncheon seminar or posting a blog about investing or a
hobby that will attract readers – and potential prospects. It takes
time to earn the business. No one is going to invest with someone
they don’t know, let alone who has not yet proven themselves.
And if the cash comes to you too easily, be wary. If it seems to
good to be true, it probably is.
Social media: Seeking “friends” or clients?
Many Millennial advisors possess a deep knowledge of
social media and online marketing. Depending on the guidelines
stipulated by their employer, they can tap into discussion groups
and other enclaves populated by potential referrals and prospects.
One successful new advisor suggested that rather than
spending too much time on social media tactics and the app
of the week, “you need a personal marketing plan that sets out
your social media strategy based on your business goals and
ideal clients. Otherwise, you’ll end up with numerous “friends”
and “followers” but have no idea of how to approach them on a
New advisors can benefit from attending targeted networking
events. For example, if you wish to prospect among say, three
groups of practicing professionals who are more likely to refer you
to others in their industry, learn about their associations and go
their events. It is better to attend two high level networking events
that you have researched carefully than five where you have little
idea of who will be there – and why.
When networking, think of the other person’s needs and learn
about their business aspirations. Ask them to identify their ideal
referral and they will probably ask you to name yours.