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Why wait for referrals when you can become a proactive referral builder?

Tips and tactics for obtaining client referrals when schmoozing is out of the question.

With files from John Stewart, Manulife Advisory Services.

To say that referrals are the most effective way for an advisor to find new clients is stating the obvious – but did you know it’s also the most popular way for clients to find an advisor? Nevertheless, netting those referrals can be quite challenging. In fact, many advisors don’t even ask for them. 

Seeking referrals in the traditional way can be unreliable and awkward for both advisor and client. Asking, “Do you have family, friends and colleagues I can contact to see if I might help them with their financial and insurance needs?” can feel uncomfortable and prove ineffective. That said, research from the Oechsli Institute’s Best Practices of Today’s Elite Advisors¹ revealed that 77 per cent of clients are willing to introduce their advisor to someone they know. 

In August 2020, Manulife Securities surveyed more than 1,400 clients, 68 per cent of whom said they had not provided a referral in the year prior to the survey. What was the reason for this? It’s notable that 84 per cent said either, “I just haven’t met anyone who I think needed a financial advisor” or “I’m not sure who to refer to my advisor, otherwise I would.”

Take a deliberate approach

So, we know that clients are willing to refer, although they don’t always know whom to refer. In this sense, they need your help. With so many clients willing to introduce you to their family and friends, a more effective approach would be for you to suggest specific people you would like to meet – in other words, you need to become a proactive referral builder. 

During your conversations with clients, they might mention family members, friends and colleagues who are important to them. When they do, you can simply jot down their names and, after the meeting, enter the names and relationships into your Client Relationship Manager (or develop a system that best works for you). 

Then, during your next regular review of the names you’ve entered, highlight the ones who may represent the best opportunity for follow up. When your next client conversation occurs, ask if it’s possible for you to contact those people. Following this deliberate approach, you’ll be able to build a highly targeted and strategic list of potential referrals. 

Four tips for becoming a proactive referral builder 

1. Carefully review each client conversation and meeting

Make a habit of recording the names and any details about people who are mentioned, immediately after each client conversation. (Consider using the handy voice recording feature on your phone to make this easier.)

2. Use probing questions to uncover names

People’s names don't always come up in conversation, so you may need to ask some probing questions to uncover them. Be mindful of how people’s personal lives may have been affected by the pandemic, especially if it’s been some time since you’ve spoken with them. 

Consider the following examples:

  • How have you been spending most of your free time during the pandemic?
  • What are you looking forward to doing when things begin returning to normal?
  • Are you going to the cottage or do you have any special events planned with family, friends or colleagues this year? 
  • Is your spouse/partner still in the same job, or have things changed there at all? 

The answers to these and similar follow-up questions are likely to naturally include people’s names.

3. Set a goal of five referrals per week 

Obtaining five referrals per week could lead to 20 new client calls per month, or 240 potential new clients over a one-year span. Assuming you get introductions for 25 per cent of these people, you will land five introductions per month and 60 per year. Applying your conversion rate from new introductions, you can quickly see the benefit of being a proactive referral builder.
4. Probe for names aligned to specific events 

Let’s assume you're planning to host an event when it’s safe to do so, to reconnect in person with some clients and their guests. Starting to lay the groundwork now by dropping some details about your plans can lead to sidebar conversations about people your clients might bring along as guests. When the time comes to send out invitations to your event, be sure to ask each client to invite the person they previously mentioned by name. 

Make it a habit

In the hustle and bustle of life, creating new habits isn’t always easy – sometimes it can take a lot longer that you might imagine – but in most cases, it starts with committing to the process. To begin to proactively build your list of referrals, it helps to set reminders on your computer or phone to always record names and other details that are shared during each client conversation. These continual reminders will keep you actively aware of the process until it simply becomes a habit. And with this habit, you’ll find it’s easier to achieve a steady stream of high-quality referrals, which ultimately can enhance your book of business. 


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