Practice Management

Getting referrals the professional way

Financial advisers should avoid these pitfalls that can turn off clients and centers of influence

Feb 9, 2014 @ 12:01 am

For decades, our industry has struggled with referrals. We have tried clever sales phrases, arm twisting, the “help me grow” appeal and the Zen-like “ask by not asking.”

Every firm offers some kind of referral training, and financial advisers still say that referrals are by far the biggest struggle that they face.

So let's turn it around and look at referrals from the client's perspective.

What do top clients and centers of influence such as accountants and attorneys think and feel when an adviser asks for a referral?

What motivates them or makes them reluctant to refer?

What fears and challenges do they face, and what can we do to help them feel better about the whole process?


Top clients experience five major fears related to referrals. They can't admit this to an adviser, because they want advisers to think of them as confident and in control, but these fears arise every time the word “referral” is mentioned:

• The adviser will embarrass them in some way. Maybe the adviser is too heavy-handed and salesy. Maybe the adviser is a bad listener, tells stupid jokes or simply doesn't fit into their circle of friends and contacts.

• Something an adviser recommends will backfire. This is an especially powerful fear for centers of influence. They simply don't want to be blamed for an adviser's actions, even though that adviser's help might be very valuable. It is frustrating, but it is reality.

• The adviser will reveal the client's personal information to the referral. Most advisers would never do this, but the client is afraid anyway.

• The client will seem too nosy or intrusive. Advisers who have any “social butterfly” or “bird dog” clients who love to brag about them should consider themselves lucky. Most top clients are extremely private people. They don't like to talk about their money or get involved with their friends' finances.

• The adviser will lose interest or not pay attention to the client any longer. It is jealousy of a sort, but top clients ask, “What happens to me when you start working with my wealthy friends? Are you going to forget about me when you get too big?”


To make referral fears go away, get into the client's mind and build a holistic referral approach that is solid, sensitive and psychologically aware.

If clients could honestly tell their advisers what they want, here is what they would say:

1. Ask me like a serious pro. Don't ask me, “Who else do you know?” That sounds like a lazy child. Do your homework. Come to me having vetted the top relationships in my world. The professionalism you display when asking for referrals demonstrates the value and importance of referrals to you. Ask weak, you get nothing. Ask strong, you have a shot.

2. Protect me from harm. Show me specifically how you will handle my referrals. Will you send a letter? Call them? Invite them to a meeting? What will they experience? And what extensive discovery or financial profiling process will you use to insulate me from potentially dangerous ideas or things that might go bad? I don't want some technology stock meltdown or a hedge fund default to damage my critical relationships.

3. Be worthy of referrals. Prove that you deserve referrals by treating me with extreme care, never dropping the ball, and delivering beyond your promises. Also, show me that you are a true expert in your craft, not just another salesman with a product pitch. If you truly bring something unique and valuable to my life, your chances of getting referrals go way up.

4. Fit in my world. Can I comfortably introduce you to my closest friends, the president of my company, my business partners or my own family? Will you make me look good or have people whispering, “What's Frank doing with that guy?”

5. Show me the love. I want to feel that I am important in your eyes, regardless of the referrals you might get. I want you to be happy that you are working with me. If our relationship is secure, I will be more comfortable bringing new people into the mix.

6. Be patient. Referrals take trust, and trust takes time. Push me too hard, too soon, and you will lose me forever. I don't care that you need to build your business. That isn't my problem. I want to believe that you are a winner already. Don't beg me for names or harass me for connections.

It is clear that the old referral ways don't work. But by understanding the client's psychology and the emotions of the referral experience, advisers may finally be able to tap into this limitless source of business potential.

Frank Maselli is a professional speaker, author, adviser coach and president of The Maselli Group.


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