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How to Get Referrals in This Environment

How to Get Referrals In this environment

Stay at home. No groups of more than two outside. Social events canceled. These are words financial advisors don’t want to see as they are trying to grow their business. Networking right now has changed, you are no longer able to go out and try to meet new potential clients at the ball game, or have your clients bring their wealthy friends out to a free dinner with you. All this, while the stock market is providing constant anxiety to you and your clients’ portfolios. The reality of the situation is grim, but take solace in that everyone is in the same position – including your competitors. That is precisely why now is the best time to be prospecting for new clients, and the best source of new clients is referrals. It is a lot easier to get a client’s friend than it is a stranger on the street, so we wanted to send some tips on how to get referrals in this environment.

Here are some stats to get you going:

  • 70% of wealthy clients are likely to refer people to their primary advisor
  • 81% of customers trust recommendations from family and friends over those from companies
  • 44% of high-net-worth clients found their wealth manager or advisor through a referral
  • 92% of advisors said that referrals from current clients are their best source of new business

If you aren’t getting as many referrals as you think you should, don’t worry. That does not mean that your client base does not trust you or want to give them to you. Here are a few tips for starting the process.


This is so overlooked in the industry. I do not mean occasionally ask a client on a passing call or meeting if they have any friends that they would feel comfortable referring to your business. Although, that should be done as well. I mean to ask and ask a lot for referrals. It might feel awkward to peddle yourself to current clients, but after an hour in a review, a simple line of “oh and Jack, if you have any friends or family you would like me to speak about their financial future, know that I grow my business primarily from referrals and would appreciate an introduction.” You might be surprised at their reaction. Do this every chance you get and train your team to do the same. If your clients are happy with how you’ve managed them, especially in turbulent times, tell them that a referral is the best compliment they can give as it shows the trust in your business. Worst case, if your client seems taken aback and refuses, you know who might have one foot out the door and who you should be looking to over-service.

Start with your top clients

This should be self-intuitive, and you should have a handle of who your best clients are. Top in terms of assets, return, relationship, or client’s network of people that you think they could refer to. These are the clients that are most likely to refer you to their friends or family, and those are the ones you need to concentrate on.

Give them some advice on how, because they might not know

This is often a critical tactic that works exceptionally well. Your clients (generally) aren’t in the industry, and they don’t know what you do for them. You do not want to come off as superior when having this conversation, but it is an important one to have with the ones who are unsure. After asking for the referral, let them know all they do not need to approach their friends aggressively. Tell them to be honest and straightforward and ask if they would be comfortable getting an introductory call from you. That’s it. Tell them it is not essential to get into portfolio specifics, just that you have provided a great experience in managing their finances long term, and it might be worth at least speaking with you, their advisor.

Make sure they know they are still exclusive clients

Tell your clients that, while you don’t need new business, you do appreciate all referrals. Tell them you only take on max 5 to 10 clients a year at this stage, and you always make sure that current clients are taken care of. It is a natural human instinct to want the best for yourself, and clients sometimes do not want to share you, as they think that you will not have enough time for them. Assure them you have a team in place and the infrastructure for responsible growth, and that they will remain exclusive. You could even joke that you take care of referring clients better!

Reward referrals

To keep momentum with clients, have a plan in place for successful and unsuccessful referrals (although, generally, referrals are successful in any sense). This is the best way to get clients on board with referring. I do not mean paying them – although there are clients who would be incentivized by this. I mean a thoughtful gift basket, a book that is in line with their interests, or telling them you have tickets to their favorite event when things get back to normal. You may need to run this by your compliance department to make sure you are above board, but in my experience, it is not a problem. I have seen advisors even keep a sizeable expensive gift basket in plain sight to get clients to notice and ask why it is sitting there. You can say that it is your referral basket, and you recently had another client refer business, so you wanted to show your appreciation. That is a way to get the conversation started as well. Don’t pressure them! The relationship is valuable, after all. You do want to be firm and ask as much as you deem appropriate. They will not be insulted if you ask, and it might go better than you think.

In summary, you should ask for referrals, speak with your top clients, give them advice, keep exclusivity, and reward positive behavior. If it sounds simple, it is because it is. Develop your action plan, stick to it, and track the statistics on if your referrals increase or stay stagnant overall. It would also be useful to keep your CRM updated with who has referred to whom, as cross relationships are essential. While some might think now is the wrong time for it, everyone is at home, so it should be seen as an opportunity – what better time to review your financial situation when you aren’t allowed to distract yourself in the world! Good luck out there.

Akhil Lodha Author
Co-founder & CEO StratiFi Technologies

Building the industry standard for understanding portfolio risk through cutting- edge technology at Stratifi.

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