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Take Your Business to the Next Level with Referrals

As consumers, we have so much choice in the marketplace, and marketing efforts don’t always effectively convince us to buy. The one type of “marketing” that holds the most sway over any decision we make is the enthusiastic referral of someone we know.

The same is true for financial advisors. Prospective clients have a lot of choice, but a referral from one of your clients can help to convince the prospect to get in touch with you. Referrals are a great way to reach prospects, because the relationship starts with a higher level of trust. Plus, it’s also easier to start conversations with the other person as you have something in common with them. Finding prospects through referrals is a powerful way to grow your business without using up your entire marketing budget.

Integrating a referral system starts with intention. You need to decide that prospecting by referral will be one of your methods of client growth, and you need to create a system that you feel confident using.

Create a Referral System

One of the biggest reasons that financial advisors do not get referrals—or at least the kind of referrals they want—is because they haven’t created a system that enables their referrers to refer effectively. Here are the components that need to be in place:

Know who you want referred: Know who your perfect prospect is so that you can build an expert status that makes you attractive to them. Be able to explain who your perfect prospect is, so someone could identify a good referral just by attending the same dinner party.

Communicate the value you offer in a way that your referrers understand: People rarely would know how many investable assets their friends have, but they would know if a friend just inherited money from a relative or if a family member just got a big payout on their retirement package. You are looking for a prospect with a problem that you are an expert at solving, so communicate that problem in such a way that friends or family recognize it.

Have a client experience worthy of sharing with prospects. Clients will be more likely to refer you if they enjoy working with you and feel that you are an invaluable resource.

Implement Your Referral System

By having a system to follow in place, you eliminate the panicky and uncomfortable situations when you come across as needy or pushy instead of confident and professional. Your ideal referral system includes 1) Asking 2) Explaining your process 3) Following up and 4) Saying thanks.

Asking. Your “ask” has to be proactive. For example, adding the words “Never too busy for referrals” in your email signature or footer is a good reminder, but you want a personal conversation with your potential referrers. Your “ask” conversation needs to be timed, so that it happens when clients are happy with your level of service and trust in your ability. Be courageous and ask clients for feedback on how you are doing. Be willing to adjust your client experience. To be sure that you remember, add “Asking for a referral” as an item on your meeting agenda and then add a note to your CRM about the meeting’s outcome.

Explaining your process. Some clients may think that saying, “Call my neighbor Bob, he’s rich”, is a referral. Be able to clearly explain who you want to be connected with and how you would like that connection to happen. For example, you may want your client to contact the person they are referring to and get permission from them for contact. Asking for permission to call prospects fits with the Do Not Call rules. Others may want to meet together with a client for coffee and just chat and get to know each other before you talk about their financial situation. Some give their clients a few of their business cards to hand out, and others prefer email introductions.

Following up. This is in two parts. First, you should follow up with the referral name and second, you should let your clients know that you have reached out to the referral. When people give you a name, ask about how they know the referral, what you could help them with, what kind of introduction would be appropriate, and then ask for the contact information. Jumping right into “Great. I’ll give them a call” when they give you a name can put you in a tough spot especially when they tell you that every advisor has fired them and then you end up making an uncomfortable call. The more information you have about the person, the easier it is to build rapport. You also get an idea of what products or services they might be looking for. Thank clients regardless of whether or not the prospect is a match. And, if it’s not, you can say, “I’ll follow up with him later when the time is right” or “We talked about finding a better fit for them in the meantime.”

Saying thanks. Be appreciative and say thank you to clients with a call or a handwritten card. Some send small thank you gifts that are appropriate and suitable for that client.

Working With Centers of Influence

The system that you set up for clients can be replicated for Centers of Influence (COIs). The COIs, like clients, need to see you as referable. They need to have a referral mindset, they need to understand what your perfect prospect looks like and they need to understand your referral process.

Be clear about reciprocity and how you are going to follow up and thank them. Strive for a win-win business relationship with COIs, and be willing to send them your marketing material about what you do and what services you offer.

If you are sending a COI a lot of business and not getting any referrals in return, have the conversation. If they’re not willing to send you referrals, you may want to choose a different COI that would be more willing to send business your way. If you’re getting lousy referrals from your COIs, it may be time to revisit your process to make sure you’re clearly communicating the criteria for your ideal prospect.

Some COIs feel that their client list is confidential, and that they can’t give referrals. Have a conversation about how you can be a resource for them, and collaborate on helping their clients in a way that respects their clients’ confidentiality.

Building a business based around referrals is an effective way to multiply your client-generating efforts without multiplying your marketing budget or the time required to prospect. Referrals can flood into your business and completely change your practice if you build an intentional referral system that encourages your clients and COIs to send the right referrals to you.

About Rosemary Smyth and Aaron Hoos

Rosemary Smyth and Aaron Hoos

Rosemary Smyth, MBA, CIM, FCSI, ACC, is an author, columnist and an international business coach for financial advisors. She spent her career working at leading investment firms before pursuing her passion for coaching. She lives in Victoria, BC. Visit her website at You can email Rosemary at:

Aaron Hoos, MBA, has worked in the financial industry since 1997. Formerly a stockbroker, insurance broker, and award-winning sales manager, today he writes for the financial and real estate industry as an educator and marketer. He is working on his second book. Visit his website at and follow him on Twitter @AaronHoos.

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