Generating More Unsolicited Referrals That Actually Turn Into Good-Fit Clients

When a financial advisory client makes a referral to their advisor, all parties can benefit: the referrer is able to connect a friend or family member with a high-quality financial advisor, the referred individual receives a valuable personal recommendation to a professional who could have a major impact on their life, and the advisor receives an introduction to an individual who could become a long-time client (and refer others as well!). However, some advisors are hesitant to actively solicit client referrals for fear of potential awkwardness or even hurting a relationship with a client.

In this guest post, relationship marketing expert Bill Cates discusses how financial advisors can get more ‘unsolicited’ referrals from clients (though this process is by no means ‘passive’) and increase the chances that those who are referred would make good-fit clients.

To start, clients tend to make more referrals when they feel strongly about the value they’re receiving from their advisors. Notably, there are opportunities to learn from both prospects and clients about what part of the advisor’s value proposition sticks out to them. For instance, an advisor might ask a new client what ‘tipped the scales’ in their decision to move forward or ask an existing client during a review meeting what they like about their working relationship with the advisor.

In addition, clients are more likely to become advocates for their advisors when they experience a transformation as a result of financial planning. For instance, through cash flow management, an advisor might be able to show their client that they can do and have things they previously thought weren’t possible.

Further, advisors can be proactive in educating clients to increase the chances of receiving good-fit referrals. For instance, letting clients know who the advisor serves best or for whom the advisor’s processes are best suited can lead to better-fit matches (also, having a client niche and/or ideal client persona can make it even clearer to clients who the advisor serves best).

While an advisor might be hesitant to directly ask for a referral they can still plant referral ‘seeds’ in a less direct manner. For example, they might encourage clients to “share the experience” or (particularly if the advisor has a sense of humor) tell a client “don’t keep me a secret”. Also, to relieve potential concerns clients might have about making a referral, the advisor could assure clients that they will handle their (and the referred individual’s) information confidentially and that referrals work best with a warm introduction (e.g., an email “handshake” from the client connecting the referred individual with the advisor and letting each party know a little more about the other).

Ultimately, the key point is that because client referrals can be a powerful source of organic growth for advisory firms, taking the time to discuss the value clients are receiving, finding opportunities for client ‘transformations’, and educating current clients on the types of individuals the advisor serves best can be worthwhile investments that result in more high-quality introductions (while reducing potential awkwardness in the process!).

65 percent of high-net-worth clients prefer to meet their advisor via referral. Without a reliable process to generate those referrals that turn into connections, advisors could be missing out on qualified prospects. However, many advisors are hesitant to ask for referrals, instead hoping current clients refer their connections unsolicited. The question becomes, how can advisors increase the chances of receiving unsolicited referrals?

Unsolicited referrals happen because an advisor has become super referable. The client experience and the client-advisor relationship has to become remarkable, i.e., worthy of remark.

Unsolicited referrals that turn into introductions and connections happen because of the advisor : how they intentionally build advocacy based on the principle of borrowed trust. (You borrow the trust in one relationship long enough to earn your own. You ‘ repay ‘ that borrowed trust by taking great care of your new relationship.)

Some advisors have intentional processes that lead to referrals without asking. Too many advisors wing it when it comes to referrals. I’m here to tell you that wishing and hoping is not a plan.