Referrals - The most effective way of generating new Clients for Financial Advisers

How to ask for Referrals – Being Referral Aware.

Referrals are the most powerful selling tool Financial Advisers will have and yet, statistically, only 11% of Advisers ever ask for referrals.

It is a fact:

People would rather do business with people they know--or know of—rather than with strangers. When you have been introduced to a potential client through a personal recommendation, that potential client will have a vastly higher comfort level with you, rather than a potential client you find through a cold lead. A positive endorsement from someone you know and trust, is so reassuring.

So why is it that, while we all cherish referrals, we do not actively pursue them as much as we should? We think it is largely a matter of habit, and once you change your habits, your earnings will simply go ‘through the roof’.

Change Your Thinking:

Imagine your business as an infinite web of relationships. Every one of your clients have the potential to refer you to dozens of other potential clients. The relationships are out there, but they will likely remain out of your reach unless you actively pursue them. It may never occur to your current clients to pass on referrals on to you. It is up to you to put the idea in their heads. You are in an industry where just about everyone you meet or see, will need the services of an experienced, professionally qualified, top quality Financial Adviser like you.

It is important that you do not feel put off by asking for referrals. When you mention the idea of referrals, you will find that on majority of occasions, clients will know of someone who might be interested in speaking to you. Many clients may have mentioned to a friend or a colleague that they are about, or are using the professional services of a Financial Adviser. It kind of makes them feel a bit more important, and to a certain extent, it is like bosting to their friends.

You will find your clients are only too happy to refer you to others. Many clients will feel proud of the fact that they have a top quality Financial Adviser advising them and will be more than delighted to share you with their friends. Getting a referral is a compliment to you for the quality of the service you have given.

Make It a Habit:

We know many Financial Advisers who have built their successful businesses solely through referrals. Many Advisers, when starting to build and develop their practices, find that their initial resources are limited. However, they got into the habit of always asking for referrals and asking clients for their feedback on their services, and if they knew anyone who could benefit from their services. They got so good at asking for referrals that it became second nature. It became a natural habit.

When you begin working with a new client, make referrals a part of your initial agreement. During your first meeting with this client, you explain to them what you do, how you go about your role and the type of services you provide. Once you have explained what you can do for them, then you further explain what ‘they’ can do for you. At the end of your introduction, you just say –

"If you are happy with my services and what I have done for you—I would like to ask you to consider anyone who you think can benefit from my services"

Once you have done your intro and mentioned referrals, you finish off by asking – “Does that all sound OK to you?” They are bound to say “Yes”, Job done! You have now introduced the idea of referrals.

When you have your final meeting and finalised the business with your client, you then explain what happens next and the type of ongoing service you will be providing. You then ask for their feedback, how they felt about the whole experience. You are bound to get very positive feedback which easily leads you on to ask,

“I mentioned during our first meeting that if you are happy with my services, if you know anyone who you think could benefit from meeting with me, then I would greatly appreciate an introduction.”

Remember that when you sign up a new client, the chances are that they will have been so impressed with your professionalism, they will find you very referable. Here are other areas for you to consider:

Whenever a client compliments you, respond with a thank you, quickly followed by a referral request. For example, "I am really pleased you are happy with my work. Do you know anyone else who you think can benefit from my services?"Use every client meeting as an opportunity to collect referrals. To keep yourself on track, jot a reminder down in your meeting preparation notes. Make it one of your standard talking points.

When conducting your client fact find, ask loads of questions about their work, who they work with, what they do, who do they do it with. Ask loads of questions about family and friends, and just refer back to them at the end of the meeting and just say, “During our conversation earlier you mentioned “so and so”. Do you think they might be interested in talking to me about what I can potentially do for them?’

Set a weekly goal for yourself.

Keep track of the number of referrals you ask for each day. You do not need to limit your requests to clients; you can also ask business associates, acquaintances, friends and family.Keep records who your referrals are and the results achieved. Remember, those who gave you referrals, are more than likely to give you more referrals in the future.Make the most of every networking opportunity. Step out of your comfort zone at networking events and set a goal to talk to at least three new people. Plan in advance what you might say. We are all drawn to interesting, enthusiastic people.

Give and You Shall Receive:

One of the most powerful ways to get referrals is to give them generously yourself. Whenever you have the opportunity to refer an associate or bring two contacts together, do so. And when you are attending a networking event, make a point of introducing people to one another. Most people will appreciate the referral, and it may inspire them to respond in kind.

The value of a referral:

If during any one month, you ask for a referral say three times and then you get one qualified lead of a referral who wants your advice and assistance. This results in the referral following your advice and becomes a new client of yours. If your average case size is £1,500 and clients do an average of 2 cases = £3,000 from this referral. So if you averaged one quality referral per month, this can generate £36,000 of new extra business per year on top of whatever your existing business is…simply by asking for referrals!

You can imagine what the results would be if you got ‘2’ quality referrals a month who do business with you!!!!

A most important point:

Always thank someone who has given you a referral. Send them a note, email or telephone them but keep them informed of your progress and maybe even treat them to a case of wine or whatever you feel is appropriate at the time.

Closing ratios from referrals are very high. Many Financial Advisers have a closing ratio of 100% with each and every referral they get! And then they get referrals from the new clients they have been referred to!

When you have done business with a client who has been referred to you, it will be so much easier to ask for referrals from them. You have introduced the idea of referrals to them at the start of the initial meeting and at the final meeting you just remind them:

“You remember that you were referred to me by Dave Smith. I was wondering if you know of anyone, like you, who you think would be interested in meeting me?”

The clients who had originally been referred to you, are far more likely to refer you to others than a client who has not been referred to you.

We guarantee that closing ratios from referrals will be a whole lot higher than cold calling, advertising, web marketing or virtually any other sales technique you might employ. It is a fact that a large proportion of your business is going to come from referrals, personal introductions and being recommended to others. In our conversations with other Financial Advisers, they estimate that 50% of their new business comes from referrals or personal introductions.

Get in the habit of it. You cannot afford not to ask for referrals!

Always be referral aware! Keep your eyes and ears open for a referral opportunity.

Action for you to take. On your Laptop, Desk top or Ipad. Establish a file called:

MY REFERRALS PROGRAMME using Excel or whatever you like. Develop a monitoring spread sheet such as (for example) the below or whatever you feel is most appropriate to you.

Date Asked

Name of Referrer

Name of Referral

Action Taken


So you monitor your progress and see the results coming in and when it starts working big time for you, and your business starts to greatly increase, remember who suggested the whole idea to you!!