Trending
Everyone like growing their business through referrals as a concept. For financial advisors, it can keep your sales manager off your back. When they say: “Are you prospecting” the advisor can reply “I grow my business through referrals.” It’s extremely attractive for another reason: A satisfied client in the background does all the heavy lifting. They find the prospect, talk up the advisor and literally deliver them. What is the cost? Zero dollars.
Like working with volunteers in nonprofits, the problem develops when you realize you cannot simply issue commands and expect results. You need to train and motivate clients to make the effort on your behalf.
Why? Clients are scared! Let us consider a simple example: A client tells a friend: “You should do business with my financial advisor.” The friend asks why: The client, an honest person says: “My advisor told me he wants more clients.” The friend says: “What’s in it for you? Why are you asking me? Are you getting paid to deliver new clients?” Your client is humiliated and vows to never put themselves in this situation again.
1. Be flattering. Everyone wants to be liked. OK, they want to be respected too, but few people want to be despised. Everyone has heard jokes about rude waiters in foreign countries. People want to be “a favorite” or part of the “in crowd.”
Expression: “I like having you as a client and enjoy working with you. I would like to have more clients just like you.”
2. Establish capacity. A Pennsylvania financial planner told me about this approach. You have a target in mind for growing your business. It’s modest, yet achievable. You might want to grow by eight new relationships this year. Let your best clients know.
Expression: I’ve done a business plan for 2024 and determined I can add eight new relationships like yours in the coming months. Before I add them in the traditional way, is there anyone you would like to recommend to be one of these eight new relationships?”
3. Timing is everything. You are an accountant. Your friend has just filed their taxes online. They do their own taxes. They owe more than they expected. They are starting to think maybe doing their own taxes isn’t such a great idea. Maybe the friend is a day trader. Their accountant told them they owe lots on their short term capital gains. The accountant tells them working with an advisor might be a good idea.
Expression: The accountant might send a referral in your direction. You might ask your prospects: “Do you use an accountant to file your taxes? Did they offer any advice?”
4. Be specific. Earlier we mentioned you “want nice people, just like them.” You can get into more detail. “Who do you know at your company who is retiring in the next nine months?” You might ask: “Who in your extended family just had their first child?”
Expression: The more specific your request, the more names will come to mind.
5. Use words they can use. Earlier we mentioned the awkward scenario: “My advisor said they want more clients.” You have made a specific request. Now your client is approaching that person.
Expression: You might tell your client: “This is the type of person I would like to know?” (They are well connected.) Another expression is “This is the type of person I may be able to help.” If someone has a problem, don’t they need help? Wouldn’t a friend want to help?
6. Make it easy by inserting yourself. Ideal as it sounds, you are not going to ask your client to cultivate the prospect, drive them to your office, introduce them to you and wait in the hall to drive them back home! You would like to meet them. Do they stop off with the client for a drink after work? Visit the same sports bar or go to the stadium for home games? (Maybe your firm has a box!)
Expression: The next time you stop off for drinks on the way home, let me know where and when. I will swing by. You can introduce me. I will buy a round and disappear afterwards.”
7. The “We have the same problem” approach. You have a client. They had a specific issue. Maybe watching the stock market gyrate up and down makes them lose sleep. You introduce them to managed money. Now someone else is in the driver’s seat. They are sleeping better.
Expression: Ask your client to approach that friend with the same problem. They can say: “I worried about the market. It kept me up at night. My advisor came up with a solution. Now I sleep better. You told me you have the same problem. How about I introduce you to my advisor. Maybe he can do for you what he did for me.”
8. The “who else wants to learn” approach. You have an older client with an even older aunt who was recently widowed. The received the death benefit from a life insurance policy. They want income. They have no interest in growth, just knowing they have enough money to live comfortably. Tell them about bonds and build a portfolio. They are happy. Your client likely knows other people in the same situation.
Expression: Review how you helped your friend. They can now approach another friend and say: “We are both in the same situation. We both needed to advise a widow how they can reinvest insurance proceeds for income. My advisor showed me how and I am happy with the solution. Would you like to learn how to do the same thing? Let me introduce you.”
9. The tempting restaurant approach. This is a very simple approach. You plan to take your client out for dinner after their portfolio review. It’s at a new restaurant everyone wants to try. You let them know they can bring a guest.
Expression: “I am meeting my advisor at 4:00 PM next Wednesday for my annual portfolio review. Afterwards, we are going to (name) restaurant for dinner. He said I could bring a guest. I know you have been wanting to try it out. Why don’t you come along? All our business will be concluded at his office. This is a social get together. I think you would enjoy meeting him.”
10. Seminar guests. You have gotten back to live seminars. You have invited clients. You hope they bring guests. You might be doing a series of seminars, one a month.
Expression: “My advisor hosts a quarterly seminar series as a benefit for current clients. Here is this month’s topic. She said I could bring a guest. The topic sounds interesting. Would you like to come vas my guest?
It makes good sense to help your clients refer their friends and colleagues. You need to make it as easy as possible for them.
Related: 12 Observations on HNW Networking From Friday’s Charity Gala