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Surprise! Wealth Managers Who Ask Their HNW Clients for Referrals Get Them

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Just ask. 

That’s all a wealth manager has to do to double the chance of receiving a referral from a current client, according to a new study released by SEI, Scorpio Partnership and NPG Wealth Management.

The study showed that 47% of investors surveyed said they would actively refer family, friends or colleagues to their wealth manager without being prompted, and another 47% said they would refer, but only if asked to do so.

However, only 30% of respondents reported being asked for referrals by their wealth managers at least once a quarter. 

The study, the last in a four-part series delving into the findings of the Futurewealth Project, was based on a survey of 3,025 respondents worldwide with an average net worth of $2.9 million.

The previous study found up-and-coming affluent investors were generally satisfied with their wealth manager, though satisfaction waned as wealth increased.

According to the new report, wealthy individuals from the Americas and Europe were more likely to recommend wealth managers if they demonstrated stability, good performance, personal service and integrity.

Fifty-eight percent of respondents in the Americas said they would recommend a stable firm, while 54% would recommend a firm based on strong performance.

The study also revealed that high-net-worth investors today increasingly desire a strong relationship with their wealth advisors.

In terms of a wealth manager’s ability to deliver a great experience, 15% of respondents cited the quality of the “salesperson,” and 14% ranked “periodic contact” and “information about new products and services” as the most important elements.

“This year’s Futurewealth research confirms that the high-net-worth global investor base cannot be lumped into one single category,” Ryan Hicke, senior VP of SEI Wealth Platform, said in a statement accompanying the study’s findings.

“Rather, this group is incredibly diverse, and we’ve discovered that depending on lifecycles and net worth, high-net-worth investors select, stay with and ultimately refer wealth managers for disparate reasons.”

Hicke stressed, however, that these investors were looking for stable, trustworthy and engaged relationships with wealth managers. “The relationship side of the business is ever-important, and managers must take the time to implement strategies that allow them to focus more heavily on personal interaction, without sacrificing quality.”

The study found that even though up-and-coming wealthy investors in the Americas were most positive about their advisors, they referred only five clients to their firm, compared with seven and eight referrals by the European and Asia/Pacific counterparts.

In addition, respondents under 40 years old, 40% of whom were asked by their wealth manager every quarter for referrals, referred nine clients.

In contrast, those over 60 referred only four clients to their wealth advisor.

In Asia/Pacific, the region with the highest average number of recommendations, some 45% of clients were asked for referrals every quarter.

Many factors prompt investors to make referrals, and the study concluded that “a blend of nature and nurture influence client referral activity.” One element of the referral game is undeniable, according to Kevin Crowe, head of solutions at SEI Advisor Network: “Wealth managers who directly ask for referrals on a consistent basis are the most likely to get them.

“Furthermore, the more successful advisors we work with have found that facilitating actual ‘introductions’ as part of the referral process increases the likelihood the referral will actually become a client.”

See previous ThinkAdvisor articles on the Futurewealthy Project:

Up-and-Coming Wealthy Generally Satisfied With Their Wealth Managers

Digital Becoming ‘New Normal’ in Serving HNW Investors: SEI

How the Up-and-Coming Wealthy Choose Advisors


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