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When it comes to meeting new clients, many advisors spend a lot of time and money on marketing to generate leads. There’s nothing wrong with that. It’s a great way to grow and scale your business. The thing to remember is that the word “lead” means they don’t know you and you will have to chase them at some level in an effort to build credibility and trust.


The Value of Referrals


Most advisors want more referrals but often struggle with tapping into their warm market to generate them. Unlike a cold lead, a referral has a recommendation for your services from a trusted source.


Here are some stats on referrals:


  • 58% of wealthy investors found their financial advisor via referral.
  • 70% of loyal millionaires are likely to refer people to their primary advisor, yet only 10.7% of advisors actually ask for referrals.
  • The lifetime value of a referred customer is 16% higher than a non-referred customer.
  • People are 400% more likely to become a client when referred by a friend.



The Psychology of Referrals


As a financial advisor, you are the most referable in the early stages of a client relationship. You just helped this new client and they are happy with you. This is the prime time for laying the referral groundwork.


Many advisors tend to go silent after they begin implementing an approved plan. But this is precisely when you need to look for a reason to reach out to this new client. While you are updating them on the progress and talking about their new plan, remind them how much you enjoy working them, that they are a representation of your ideal client and that you are looking to find more clients just like them.


Another challenge that makes referrals harder to come by is that it’s likely your clients don’t know everything you do. I’m sure you’ve had a client tell you they hired someone for a service you provide. To fix this, create a simple one-page document with all your services and make sure to give it to every client during your onboarding and review meetings. You might even highlight the services they already receive from you and discuss any services they may need in the future. Here’s an example:


Download here


The Need for a Referral Process


Research tells us that about 80% of your current clients will happily refer you but they just don’t know how. It’s likely that many of them are trying, but the way they go about it won’t actually lead to a referral.


Even for advisors who are technically very referrable, the lack of a client experience process makes generating these introductions very challenging for their current clients.


This is where a referral expert can help you. Building in the referral process to the way you do business on a daily basis at your financial advisory practice is imperative to garner more referrals.


At Quantum we place a high value on client referrals and host regular training to help our advisors build a sustainable and profitable referral process. Back by popular demand, our next training with referral guru Dan Allison will be on August 08, 2022. Call us at 800.440.1088 to reserve your spot.


Listen to our podcast featuring Dan Allison here.