As a financial advisor, one of the most effective methods to grow your client base is through referrals. According to a study by Heaton and Friends (2018), 92% of consumers trust referrals from people they know, making them an invaluable resource for business growth. In this article, we’ll explore the best strategies for financial advisors to get referrals, backed up with proven data that they work. We’ll also discuss actionable steps to take and words to use to ensure your success.

Provide Exceptional Service

The foundation of any referral strategy is providing exceptional service to your current clients. Multiple studies have proven satisfied customers are much more likely to be loyal, giving you more assets to manage and refer others to your business.

Actionable steps:

  • Be responsive and communicative with your clients. Respond to their calls and emails promptly.  Touch all your “A” and “B” clients at least twice a month with newsletters, phone calls, cards, emails, etc.  Arrange a quarterly face-to-face with your “A” clients, virtual or in person.
  • Provide your clients with low-cost high-value services like access to online tools or even your rolodex of value-add service partners (mortgage broker, home inspector, estate attorney, etc.).   
  • Enhance and illustrate your planning process. Go beyond simple asset management, offering comprehensive and tailored financial advice based on your clients’ specific needs and goals. 
  • Continually educate yourself on industry trends and new investment opportunities to provide the best advice possible.

Develop a Referral Mindset

Adopting a referral mindset means consistently incorporating referral generation into your daily activities. It’s essential to make referrals a natural part of your conversations and interactions with clients and contacts.

Actionable steps:

  • Identify your clients who appreciate the value of what you do, have a circle of influence with your ideal audience and enjoy helping others.  Then, whenever you have a positive interaction with them, ask if they know anyone “we” could help in similar ways.
  • Include a referral request in your email signature or marketing materials.
  • Regularly remind your clients about the importance of referrals, emphasizing studies that evidence most people want to learn about a financial service provider from someone they know.

Build Strong Relationships with Strategic Partners

Financial advisors can benefit from forming strategic partnerships with professionals who serve a similar clientele, such as accountants, attorneys, and real estate agents. These relationships can lead to mutual referrals, helping both parties grow their businesses.

Actionable steps:

  • Identify professionals in complementary industries and reach out to them to establish a working relationship.
  • Offer to provide educational materials or workshops to their clients, demonstrating your expertise and value.
  • Set up regular meetings or networking events to maintain and strengthen these partnerships.

Leverage Social Proof

Positive client testimonials and success stories can serve as powerful social proof, which can help convince potential clients to trust your services. According to a study by Nielsen (2012), 70% of people trust online reviews and testimonials.

Actionable steps:

  • Request testimonials from satisfied clients and share them on your website, social media platforms, and marketing materials.  Videos are especially powerful.
  • Encourage clients to leave reviews on third-party platforms like Google and Yelp.
  • Share success stories during meetings with potential clients or through blog posts and case studies.

Create a Referral Rewards Program

Incentivizing referrals through a rewards program can motivate clients to actively recommend your services to their networks. A study by the Journal of Marketing (2010) found that referral reward programs can increase the number of referrals by 25%.

Actionable steps:

  • Establish a referral rewards program that offers incentives such as discounts on future services, local memberships, gift cards, or charitable donations.
  • Promote the program to your clients through emails, newsletters, and social media.
  • Regularly track the results of your referral rewards program and adjust the incentives as necessary to maximize effectiveness.

Referral Marketing is Multifaceted

Growing your financial advisory business through referrals is a multifaceted process combining exceptional service, mindset, strategic partnerships, social proof, and reward systems. By taking a number of these actionable steps utilizing these data-backed strategies, you can increase your client base and grow your business with greater ease.

If you’d like a complimentary 30-minute clarity session to review your referral and growth strategies with some immediate breakthrough perspectives, just click the link below to find a convenient time to connect.