Increasing Results and Lowering Risk via Different Referral Introduction Strategies for Financial Advisors

Welcome to this week's edition of the Can I Borrow Your Car newsletter.  Today we are going to, surprise, compare referral strategies to fly fishing.  Shocking, I know.

There is a reason, though, that I love both fly fishing and financial planning so much and see them as so closely integrated.  Both are simple in concept and overwhelmingly complex in execution.  

For me, personally, fly fishing is a pursuit and a passion.  Financial planning, obviously, is what all my coaching clients do professionally.  When I have a client that loves both, the platform for teaching and profound coaching becomes much, much wider and powerful.

Back to the subject for this week:  getting introductions that work

For any worthy pursuit it is necessary to use the right tool for the job.  One of the things that becomes evident to most serious anglers is the reality of different types of fly fishing rods and the eternal war of versatility vs. specialization.  

The exact same conflict occurs in the world of predictable referrals (yes predictable!) when it comes to introduction strategies.

Let’s look at the current usage that I see out in the marketplace right now:

1.  Passive/hope strategy.  This is where you leave the process of identifying and introducing the prospect to you completely up to your client.  This raises the risk that (a) the referral never happens and (b) that your referral source(s) get discouraged by rejection.
2. Asking every client (and anyone else that can fog a mirror) for referrals every time you engage with them on or offline.  I call this the referral pest/beggar.  You are training your referral sources that (a) you only want stuff for you and (b) that you are desperate.

Neither of those widely used (intentionally or not) strategies is optimal, or quite frankly, a good idea. 

Instead, you need to begin thinking intentionally and within a system, about layering introduction strategies within a context that will be approachable, understandable, relaxing and fun for your referral sources.  That might sound complicated and that is because it is.  At one level of your financial relationship with your client you get paid for addressing complexity objectively and subjectively.  You work with numbers and emotions…your referral process should too.

Let’s get to the good stuff.  Here is a timeline of relationship development to ‘store’ your strategies on.

1. Social:  The easiest introductions to have your clients undertake for you and the most underutilized and underappreciated.  Think about it.  Are you asking your clients to do all the hard work of convincing one of their colleagues or friends to commit to a sales meeting with you?  Instead, look for low friction, low risk, social opportunities to meet and develop the beginning phase of any normal relationship.  Btw, fly fishing is epic for this…but, anything could work.  This is the best way to predict introductions, at a higher volume, to ideal clients.
2. Semi-professional:  I call this the back up plan.  These introductions are initiated when one of your referral sources has a conversation (planned or spontaneous) with someone they know and you and/or their current advisor get dropped into the conversation.  One easier way to get introduced is that you are a great second option in case something happens to their current advisor.  Most of your ideal clients will be savvy enough to understand the value of redundancy.  Less volume than social.
3. Professional:  This is where you are referred by a COI (center of influence) and is one of the most sought out introductions.  Another professional is telling their client to meet with you to discuss hiring you.  Once again, these are amazing, but typically are going to be a lower volume of referrals as a result.
4. Personal:  The best referrals.  This is where your referral source is so confident (Raving Fans anyone?!?) that you are the best that they emphatically insist that their friend meet with you to seriously consider working with you no matter what.

Here is how you make it all work:  think of the referral process as adding layers to a new relationship.  

When I work with my clients we spend a lot of time in the beginning teaching and reassuring them of the value and priority of getting enough social introductions.  This is even more important, to do intentionally, post pandemic.  Most of the reasons I see clients and others balking at prioritizing and systematizing social referral introductions is because of a ignorance or malignant fantasy around how marketing really works.

When they or anyone else says they don’t have time to do it…I ask them how long it takes them to generate new clients now AND to describe to me how it is predictable and timely.  They usually can’t.  You don’t need to do business that way in our industry.  What you do is tailor made for referrals at scale and in a life changing way for you and your clients.

Execution:  spend an hour examining your top 10 client relationships and detail out what they like to do socially.  Then challenge yourself to be curious and persistent in experiencing that with them.  I guarantee you this:  if you spend more time with your clients socially…you will get more referrals.

Related: How Financial Advisors Can Create Memorable Experiences for Their Best Clients