10 Referral Ideas for Financial Advisors

marketing referrals May 14, 2018

When it comes to growing your practice, you probably have a few tactics up your sleeve — but it’s important to know that not all tactics are created equal, especially when it comes to referrals.

Getting clients through referrals can lead to better clients, faster growth, and lower investment than other approaches. With referral clients, you’ve already established a baseline level of trust and credibility, which helps you close deals and develop valuable and lasting relationships.

That means that referral ideas for financial advisors are a hot commodity. And, the numbers drive home how valuable referrals truly are.

Those who are referred by a friend are 400% more likely to make a purchase or become a client, and once they do become a client their lifetime value is 16% higher than that of a non-referred customer. This may be due to loyalty, as referred customers are 20% less likely to choose another brand if something shifts in the market.

There’s also the fact that most clients — and the most highly desired clients — rely heavily on referrals from friends: nearly 75% of consumers use word-of-mouth as a key influencer in their decision process, and 58% of wealthy investors found their financial advisors through referrals.

10 Referral Ideas for Financial Advisors - Blog Post Quote 1_ CWA Network


Yet, despite all of the above, only 10.7% of financial advisors ask for referrals.

There are myriad reasons that hold people back from asking for referrals. There’s a fear of making others uncomfortable or of pushing existing clients too far, and a desire to not always be selling. There are also challenges in the landscape itself. In the Investment News 2016 benchmarking study of the financial performance of financial advisors, it showed that referrals are no longer the primary driver of growth for registered investment advisors.

This may be because the number of available clients is smaller, or because of competition with digital products that offer financial advising, but the takeaway is that, more than ever, financial advisors are in need of good referral ideas.

Luckily, there’s a wide variety of referral ideas for financial advisors that can help maximize new introductions and existing clientele to build your client base — without going out of your comfort zone or making anyone feel uncomfortable (yourself included).

10 Referral Ideas for Financial Advisors

  1. Start with your top clients. Think about which of your current clients best fit the description of your “ideal client.” This is the type of person you want more of, and they are likely to be able to refer similar people, so start there. When doing this, make sure you choose clients with whom you have a good relationship, and who are particularly happy with your service. These people will be happy to spread the word, and their enthusiasm for your services will come across authentically when they refer friends, acquaintances, or coworkers.
  2. Know what kind of client you want. It’s impossible to ask for the type of referral you want if you haven’t defined it. What kind of person or company do you want to work with? What goals are you hoping to help them achieve? No amount of referral ideas will help if you don’t know what you’re looking for.
  3. Listen for valuable pieces of information. When you meet with a client, take a mental note of anything they mention that could lead to introductions for you — and after the meeting ends, write down what you heard. This could be the name of charities they’re on, the golf course they belong to, names that they mentioned, etc. These may just feel like passing remarks, but if you follow up on them, they can be the source of future prospects.
  4. Utilize group emails. It’s not uncommon to get an email from a client that was also sent to other people on their contact list. When this happens, take everyone who was CC’d on the email and put them on a list of future prospects. At a later point, you can bring up these names and ask your client for an introduction.
  5. Do your homework. There are many other ways, besides group emails, to figure out who your client knows. Through internet research and simply paying attention, you can compile a list of people your client knows who could be valuable contacts: their lawyer or doctor, members of a club they belong to, former or current coworkers, family members, etc. Talking through this list with your client will show that you are thorough and tenacious, and is likely to lead to at least one or two introductions.
  6. Leverage social media. Social media can be a powerful tool for using the existing networks of your current clients. Make sure you have Facebook and LinkedIn pages, and then invite all of your clients to “Like” or “Follow” the page. This in and of itself will help expose you to their networks, as most social networks will suggest pages to users based on what their friends “Like.” You can also directly encourage your clients to forward the page to their friends.
  7. Keep it light. For whatever reason, some clients might feel nervous or uncomfortable about giving a referral. Make it clear that this is not a life-or-death situation, and take the tension out of the room, with a joke. Saying something like, “No need to go overboard, just write down the contact info of everybody you’ve ever met,” is a lighthearted way to show that you’re eager for referrals while also making the client feel relaxed and comfortable.
  8. Consider an incentive. In terms of referral ideas for financial advisors, providing a reward for referrals is nothing groundbreaking — but it is effective. Some clients might be totally open to giving you a referral, or several, but hey just aren’t motivated to do it, and so it continually slips out of their mind. If they know that a referral will return some sort of reward for them, it will keep it top of mind. Plus, providing some sort of gift for a referral shows how appreciative you are and continues to strengthen your relationship with the client. The gift itself is up to you, but some ideas include chocolates or a nice bottle of wine, gift certificates to local stores, or a reduced price on your services.
  9. Lower the barrier to entry. If you have a hefty initial consultation fee, or a jam-packed schedule with few available meeting times, your clients may be hesitant to refer you to their friends. By taking steps to make the referral feel easy, low-commitment, and low-investment, you’ll make the client much more willing to provide you with names. Do this by offering a free or reduced cost initial meeting, and promising to give VIP treatment to new clients that come in through referrals.
  10. Provide great service. The best kinds of referrals are those you don’t have to ask for. You can get these by simply providing great service that makes your client happy. When you do this, your clients will naturally talk about you with their friends and freely recommend your services. This may seem obvious, but it’s truly the strongest referral idea that financial advisors can use — not only for growing their client base, but also for building a valuable practice that will stand the test of time.

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