Your Thriving Practice

Everything you wanted to know about referrals (but were too afraid to ask)

5 tips to potentially build referrals

As a financial professional, you know the value of referral business. It not only helps grow your book, but forging relationships with new clients creates a sort of self-sustaining power source — the more you grow and cultivate your network, the more you can gain new referrals.

Of course, this is often easier said than done. It can be difficult and awkward (not to mention potentially uncouth) to outright ask your clients for referrals. You have to ask the right people the right way.

Here’s a closer look at who, when, and why you should build your referral network and the significant benefits making this a priority can offer your business.


1. Focus on the now

One of the surest ways to nurture a referral network is to focus on providing for the clients you already have.

"You don’t have to reinvent the wheel, but having a destination where people can learn more about you and easily contact you is crucial."Word of mouth is a powerful tool — according to ThinkAdvisor, approximately 58% of wealthy investors reported finding their current financial professional via referral. Having a track record of success will pay dividends, and you may find you’ll get referral business without ever having to ask for it.

According to Olivier Wagner, founder of 1040 Abroad, a financial services firm catering to expatriates, cultivating a strong, referral-ready relationship with your clients means “understanding their unique needs and circumstances, and consistently exceeding their expectations. Financial professionals can proactively communicate with clients, regularly providing them with personalized insights, updates on their investments, and educational resources.”

2. It’s all about timing

There’s a time and a place to ask your clients for referrals. For example, you shouldn’t be mentioning them during serious meetings or at the end of every client interaction. However, if you have an established rapport, and you’re having a more casual conversation with your clients (or they’re thanking you for doing a good job), it may not be a bad time to bring it up.

“Request referrals directly: Don't be afraid to ask your satisfied clients for referrals. You can politely request referrals during client meetings or through personalized follow-up communications,” Jon Morgan, the CEO and Editor-in-Chief of Venture Smarter.

3. Curate your online presence

This may be done in a few different ways, but it all boils down to one thing: make sure you are easy to find. For example, you may prioritize having an informative, easy-to-use website and a legitimate social media presence.

"the more you grow and cultivate your network, the more you can gain new referrals." You don’t have to reinvent the wheel, but having a destination where people can learn more about you and easily contact you is crucial. It is essential that potential clients have a place to visit once they’ve been referred to you by a colleague, friend, or family member.

Having a thoughtful online presence is a priority for Morgan. He says that financial professionals need to “maintain an informative and visually appealing website, create engaging content on social media platforms, and encourage satisfied clients to leave positive reviews.” These efforts may increase your visibility and credibility, making referrals more likely.

4. Lower the pressure

Financial professionals may be hesitant to ask their clients for referrals because they don’t want to come off as pushy or “salesy.” It can be a delicate balance — you have to be confident enough to ask, but don’t want to tarnish the good reputation you have with your client. That’s why it’s so important to communicate that there’s no pressure, and you won’t continue to ask if they say no. Once your client feels more comfortable, they may come to you with a few names even if they didn’t have anything for you at that moment.

5. Networking, networking, networking

You may also gain referrals from people other than your current clients. Carl Jensen, a personal finance expert and founder of Compare Banks, refers to this process as “creating collaborative connections.” In other words, building a network of professionals in other fields — such as lawyers, tax professionals and real estate agents — can potentially be beneficial to all parties.

“Financial professionals can refer clients to these specialists and vice versa by developing mutually beneficial connections with them, resulting in the formation of a network of reciprocal referrals,” says Jensen.

By developing a strong network of professionals, and incorporating other pieces of advice, seeking and gaining referrals may become a natural part of your process lead to continued success.

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