Tips for Financial Advisors to Get More Client Referrals

May 19, 2023 | Guides

Human relationships are the heartbeat of every successful business. There’s a powerful quote about this topic from Hubert Joly, a Harvard Business School faculty member, who was the former CEO of Best Buy.

“The heart of business is the idea of pursuing a noble purpose, putting people at the center, creating the environment where you can release that human magic, embrace all stakeholders, and treat profit as an outcome,” explains Yale’s School of Management.

Sometimes, it’s easy to overlook this perspective, especially in light of the rise of AI, societal negativity, and the increasing extent to which people are relying on technology for human interactions. The truth is; however, that community networks establish foundations for independent businesses, especially for RIAs, to be successful. It’s impossible to run a business in a vacuum, without the support of loyal customers and partners. 

As the saying goes, success takes a village. So here’s how to ask your community for support to help grow your business.

1. Prioritize systems-building above sales tactics

As the saying goes, it’s important to focus on the forest rather than becoming fixated on individual trees. 

The practice of requesting referrals is an art that’s deeply rooted in meaningful conversations and a sense of trust  — not just asking people in your network to send you business. 

With this mindset, you may consider establishing a referral program that provides a percentage-based revenue share or flat fee as compensation for sending new customers to your business. It’s also important to think about the frequency of which you’ll ask for referrals and whether you’ll create a formalized, structured network.

For instance, you could use software like Circle, MightyNetworks, or Higher Logic to build a dedicated community for your brand. With some simple communication infrastructure in place, the process of referral building can be more systematic.

2. Build a professional alliance

It’s about good manners. Give before you get. Offer value beyond simply asking for business.

In addition to asking for referrals, it’s important to proactively offer them. That’s where professional alliance building can help. Especially if you choose to establish a referral network or dedicated brand community around your firm, the key is to facilitate continuous conversational exchange.

The key to establishing a professional alliance is to bring together like minded professionals who will benefit from being in close contact with one another. Discussions surrounding referrals should feel natural rather than forced.

Here are the following types of professionals who you can think about including:

  • Complementary professionals such as CPAs or financial planners
  • Fellow independent financial advisors who may be interested in teaming up to provide service to a book of business
  • Legal professionals, particularly estate and trust planners
  • Human resources consultants and recruiters who maintain relationships with people at companies

By having everyone in a group together, communications can take place in a more free-form, straightforward, and streamlined manner. Beyond providing referrals to your firm, alliance members can direct business to each other.

3. Talk to like-minded professionals in your network

If a community or professional alliance isn’t a good fit for your specific business, that’s absolutely fine. There’s no need to overcomplicate the request. Asking for referrals is as simple as doing exactly that — asking.

Especially if you’re in a pinch and need to grow your client base, you can simply reach out to fellow professionals in your network. There are two recommended approaches to take:

First, you could try posting a status update on LinkedIn, simply mentioning that you’re taking on new clients and looking for referrals. You can also reach out to specific people in your network 1:1, via LinkedIn, email, or even a phone call.

You can proactively offer to provide referrals in return.

Be direct, transparent, and clear that you are seeking referrals. Your request could be as simple as, “I’m looking to grow my financial advisory practice, and I’m seeking referrals to great clients. I’d be happy to send referrals your way, as well.”

4. Ask your best clients

Just as you care about seeing your book of business succeed, your best clients will want to see your practice evolve and grow.

If you’re seeking new clients, you can simply reach out to your most loyal customers for support. These conversations can take place over email, over the phone, through a blog post, or via newsletter outreach. Your message can be as simple as this:

“I have a few spots open in my financial advisory practice, and I’m looking to work with the best. I’m wondering if you happen to know anyone looking for a financial advisor?”

Be kind, be direct, and make it clear that you’re not looking to engage in salesy practices.

Last but not least

Don’t be afraid of rejection. Remember to say thank you.

At the end of the day, referrals are about conversation. The ability to ask for support is a healthy business practice.

About CircleBlack

CircleBlack is an all-in-one technology platform for relationship-focused financial advisors. To learn how our software can help you build, manage, and grow your RIA practice, get in touch to request a demo.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice.

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