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Practice Management > Building Your Business

4 Tips to Boost Client Referrals

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While financial advisors agree that client referrals are critical to a firm’s growth, nearly half say they’ve asked only “a small percentage” of their clients for a referral, according to an SEI Quick Poll released Monday.

Additionally, only one in five advisors said that seeking referrals is a “regular routine and a key reason of my success,” the Quick Poll finds.

“It’s clear that the majority of advisors aren’t capitalizing on the valuable opportunity sitting right in front of them,” John Anderson, head of practice management solutions for the SEI Advisor Network, said in a statement.

“Every good advisor knows they should be utilizing existing clients to generate referrals. The only question is how,” added Taylor Ranker of The Ranker-Hanshaw Group in Harrisburg, Pa.

SEI Advisor Network developed a whitepaper on the topic as a result of the poll, titled Turbo-charging Client Referrals. SEI identified four ways in which advisors should generate both referrals and introductions. They include:

  1. Engage your clients–Research shows that engaged clients are an advisor’s greatest advocates. They believe in what advisors do, are committed to their success and, with coaching, can provide a steady stream of qualified prospects. Advisors can improve client engagement by following three simple steps: 1) working with the right clients whose needs match their strengths’; 2) developing a deeper connection through frequent, quality contact and ongoing dialogue; and 3) asking the right questions by encouraging client input and putting that feedback into practice.
  2. Follow the three W’s–Successful referral-only practices always have the three W’s–Who, What, and When–on their mind. These advisors develop and follow client profiles, knowing who they want to attract in terms of demographics, occupation, lifestyle, and personality. They have a clear value proposition detailing what about their practice distinguishes them from other advisors, enabling them to pinpoint a target audience and play to the practice’s strengths. And, they know when to ask for a referral, an often overlooked step to success.
  3. Leverage technology–Social networking tools are an advisor’s best friend. With LinkedIn’s “People You May Know” tool, advisors can discover and vet potential prospects through connections to a client. Best practices recommend asking clients for permission before sending requests to their connections. Successful advisors periodically update their online profiles and practice “drip marketing,” to connect with prospects over a set amount of time, rather than bombarding them with unnecessary content.
  4. Do your homework–When approaching a client, it’s important to be prepared. First, consider asking for introductions, not just referrals. Second, it’s best to work from a script or, at a minimum, practice ahead of time. Often, clients can’t immediately think of anyone appropriate for an introduction, but advisors can skirt this problem by having one or two prospective names in mind. Also, clients are more likely to offer referrals if the process is easy. It’s best for advisors to define their ideal “five-star client” and provide the description to their clients. That way, clients will better understand what their advisors are looking for and will be more engaged in the process.


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