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Why Advisors Don’t Ask for Referrals


What is the best way for you to get a new client as a financial advisor? If you’re thinking of cold calling and seminars you’re missing what I’m saying here. There are two main ways that my clients like to grow their business.

One way is through introductions and referrals, but the number one way my clients get introductions is through very happy, satisfied clients.

How many of you believe that a qualified referral from happy clients is the best way to get a new client? 99 out of 100 advisors will raise their hands. There’s always a few people that still believe in cold calling.

If you agree with my statement that getting introduced from a happy client is the best way to grow your business than I have a question for you. How much time, energy, and effort do you put towards that?

If you believe that, then why aren’t you putting more energy and effort into making your clients happy?

In my experiences, while getting new clients introduced to me from previous clients, it’s 5% strategy and 95% psychology. It’s not in that 80/20 rule. There’s no magical letter to send out that will get you these clients.

What do you need to get a qualified referral? I’m going to give you the formula real quick. You need to be aware and get your head around your own psychology. You need to let your clients know that you are here to help and here to serve. Timing – We do not control the third piece here, but we control the first and second piece.

There are advisors in this industry saying you don’t need to go for referrals. We’re professionals. Doctors and surgeons don’t do that. Well, yes they do if you’ve ever seen a sign in the doctor’s office saying we’re accepting new patients that’s them letting people know they’re open for business.

I’ll give you the 5% strategy breakdown first. As you speak to your clients and if it’s a positive conversation let them know you appreciate them and by the way, if you run across someone we can help we would love that opportunity. There’s no magic verbiage, you just need to have them keep you in mind and say that to them.

Then you have your reviews – is there anything else we can do for you? If you get a positive response let them know to please keep you in mind. We’re not going to demand names and say who do you know? We don’t do that, it’s unprofessional.

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A lot of you think that you need to ask for names. No, you just need to create awareness.

What would happen to your business 3 – 5 times a day if you happen to just mention this and then you have a tagline at the bottom and invite clients to events? You’re creating a giant awareness campaign.

My experience has always been if you would just blindly follow that process for 12 months you would be a very happy camper. It’s not an instant gratification game. After five days advisors will say “Well, Joe I haven’t received any names yet.” You won’t, but after year 1, year 2, and year 3 it will start to escalate.

That 5% that’s your strategy. I just saved you $5,000 – $10,000. You don’t need to go to the advisory bootcamps or anything. You just need to remind your clients 3 – 5 times a day that you’re open for business.

When a client or friend asks you how’s business if you say busy, many times they’re thinking well they’re busy, so I don’t want to give any names out or they already have enough on their plate, so I’m not going to go to them with my retirement account.

The older you get and the more experience you have in the industry it’s almost like their business development side shuts down because they’re ready to retire soon.

Shifting to the 95% mindset. The earlier in your career you get the psychology and mindset the better you’ll do. Fear and limiting beliefs will prevent you from creating awareness with clients and make you believe you don’t deserve this success.

A lot of advisors think they feel lucky to have clients, to begin with, and how could I ever impose on them or I don’t want to piss them off.

What it really boils down is your value proposition. These beliefs are what’s costing you millions of dollars a year. Referral gathering and introductions is about you getting uncomfortable to do new things.

Many advisors after they realize they’re not doing these things they say well I’m going to do five a day.

No, you’re not, just start with asking your good friend or best clients because you haven’t done any introductions in five years. How are you going to scale up that quickly and do five a day?

The first 10 of them are going to be really uncomfortable because it’s a new behavior. I’ve set this up where you’re not going to fail. We’re just saying keep us in mind, not asking for names.

It’s all about failure and rejection proofing the process. If you can not stomach the statement I’ll keep you in mind then you’re going to struggle in this business for a long time. If you can’t stomach that as a failure in rejection then we need to have a whole different conversation.

Don’t say “Hey we’re looking to grow our business” in these statements either. That makes the statement about you and doesn’t that sound selfish? I want this to be about service, helping people, and getting the word out.
Now I have clients who have done this and they’ll get 50 or 80 names a year from this and no they’re not always qualified. Then, you tell the story of I don’t want little clients, so I’m not going to do this. That’s an excuse.

If in the introductory call you find out they have no money here’s what you say “Based on your current economic situation my fees would eat into your retirement and as a fiduciary, I can not do that, so I’m going to recommend you to ‘x’.” X can be a discount broker, a bank or wherever.

You’re going to give every human being that comes in at least 20 – 30 minutes of your time and you’ll diagnose them. Half will not be qualified either non-economically or non-emotionally. Then, just move on, that’s the worst case scenario.

Do not make this more complicated than it is. Don’t buy into because I’m a professional, that’s a narrative you tell yourself.

Think about how long you’ve been in business and think about getting 3 – 5 new clients a year, how much revenue is that taking away from you and your family each year?

I want you to write that number down on a piece of paper and then imagine that number in your bank account.

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