After several years of market-driven asset growth, financial advisors are reawakening to the need for more sustainable growth through new client acquisition. Although an increasing number of advisors are responding to the challenge by upping their digital marketing game, many, especially those with more established and successful practices, still consider client referrals as an essential way to organically grow their business. Yet, most advisors struggle with asking for referrals, which might explain why few advisors even bother to ask. Considering that most loyal high net worth clients say they are likely to refer people to their primary advisor if asked, that is an apparent and very costly disconnect.

Why Advisors Don’t Ask for Referrals

When asked where their very best clients came from, successful financial advisors will likely say “referrals,” which raises the question “why don’t more advisors ask for referrals?”

The reasons given by advisors for not asking for referrals vary widely but the following are among the more common:

• I don’t want to make my clients uncomfortable.
• I don’t want my clients to think I need the business.
• It makes me feel awkward.
• I don’t know how.

If advisors are being truly honest, none of these are valid reasons, except perhaps the last one. However, not knowing how to ask for referrals is more of an excuse, which can be easily remedied. The others are really just perceptions born from a mindset of the advisor’s own making. For many advisors, it’s that mindset that has them questioning whether they are even referable. If they don’t think they are referable, advisors are naturally going to feel awkward or believe they will make their clients uncomfortable. But, not being referable is not a valid reason, it’s an excuse.

Making Yourself More Referable

If you are serious about getting more referrals from your existing clients, you should think less about how you ask for referrals and think more about how referable you are to begin with. Most advisors are experiencing a crisis of differentiation, making it difficult to stand out in a crowded field, which makes it difficult for their clients to have enthusiastic conversations about them with their friends and colleagues.   Why would a client want to refer someone to you if you’re no different than the average advisor? What can your clients say about you that will spark the genuine interest of other people?

Make Yourself More Interesting

When you ask your clients to provide referrals, they want to be able to share a unique experience – a story that makes them more interesting to the people they approach. Referable advisors may be providing the same services and benefits to their clients, but they consciously do things that make them more referable. For example, they work to raise their visibility through media appearances or publications. They advance their thought leadership through active writing. They volunteer in their local community. They continuously pursue advanced education. When you become more interesting to your clients, they become more interested in sharing your story with others.

Make Yourself Irreplaceable

In a survey conducted by SEI and the Financial Planning Association, 63% of high net worth investors said they find high or very high value in an advisor who personalizes advice. While that may not be a new revelation, highly referable advisors take personalized advice to the next level by adding custom communications to their service offering. Referable advisors utilize content automation systems designed to engage each client on a personal level by tailoring content to their needs and interests. The system then tracks client engagement through emails, social media or the advisor’s website to further hone the information to the client’s preferences. A higher level of engagement with your clients will also enable you and your team to anticipate when a client needs to be informed in advance of difficult news or something occurring that impacts their plan.

The more you can engage your clients on a personal level, the more value they receive, which is key to becoming irreplaceable and more referable.

Make Yourself a Noted Expert

Many of the more referable advisors have narrowed their focus, specializing in a niche that requires a level of expertise not generally available through most advisors. The deeper the niche, the greater the expertise needed to be of value and the greater the opportunity to gain notoriety within that sphere of influence. For example, if you can provide value unique to cardiologists, it makes it easier for them to have a more specialized conversation with their colleagues in the proper context of how you can be of value to them.

Don’t Ask for Referrals, Ask for Introductions

Once you have made yourself more referable, you shouldn’t have to resort to asking for referrals. By elevating the client experience and strengthening your personal relationships with your best clients, they become your advocates, willing to speak positively on your behalf when asked to do so. However, according to an Oechsli Institute survey, 83% of wealthy clients say they feel uncomfortable when their advisor asks them for a referral. However, the same percentage of clients indicated they will give you a personal introduction when asked. It may sound like a subtle distinction, but it makes a big difference in the way your clients and prospective clients perceive you. The same survey revealed that 56% of wealthy clients found their financial advisor through a personal introduction.

When you ask for introductions, you take the onus off your clients to release the names and phone numbers of potential referrals. Instead, you conduct the research into your clients’ sphere of influence to identify people with your “ideal client” attributes. These candidates can be found on your clients’ LinkedIn page, or observed at social events, or mentioned by your clients in conversation.

The “introduction” conversation is very different from the referral ask: Hey John, I see you’re connected to Stan Smith on LinkedIn (or, I see you know Stan Smith from the country club, etc.). How do you know him? He looks like a fascinating guy I like to meet. What would be a good way to meet Stan?

One easy way to get the introduction: How about I take the three of us to lunch one day next week?

With a systematic approach, you can be researching clients and having introduction conversations several times a week. With a goal of one introduction per week, you gain 52 new introductions a year to ideal client candidates. When you become highly referable, you can expect your strongest client advocates to introduce you multiple times. Suddenly, your organic growth becomes self-perpetuating and sustainable.

Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers, mutual funds, ETFs, wealth managers and fintech companies grow through marketing, public relations and sales programs. Click to read Dan’s latest Insight articles and to schedule a complimentary consultation.