How to Get Referrals: Financial Advisor Referral Management for Growth

What's one of the clearest signs of a healthy and thriving practice? It’s pretty simple: happy clients willing to contribute to a full pipeline of prospects. But getting client referrals isn’t always as straightforward as it might seem. When you ask your clients to recommend you to their friends or connect you with a colleague, you may realize you aren’t quite sure where to start or how to create an ongoing referral program.

This blog looks at why referrals are so important to your practice and how you can get more referrals from your best clients.

Why Are Client Referrals Key to Business Growth?

Have you ever asked friends and family for recommendations when searching for something important, like a new doctor, dentist, or gym? Many trust the people in their circles to provide trustworthy feedback and personal experiences. For advisors, a referral typically occurs in one of two ways:

1. One of your clients chooses to endorse your practice to their own circle.
2. The client gives you contact information to connect with someone they think would benefit from your services.

Client referrals can be the most powerful marketing tool you have for growing your practice. When clients give your name to friends, family, or colleagues, it reflects a high level of satisfaction and trust in your services. These referrals become a powerful source of new business because prospects are more likely to trust the recommendation of someone they know and respect.

What Is a Client Referral Strategy?

Effective client referral marketing strategies begin with providing exceptional service and value to existing clients. Happy clients are more inclined to recommend their advisors to others. Building strong relationships, understanding clients' unique needs, and delivering personalized financial solutions are key elements in earning these referrals. Financial advisors can also proactively ask for referrals. This strategy requires tact and timing to increase the likelihood of success. A formal referral program can also incentivize clients to make referrals. Offering rewards or exclusive benefits for successful referrals can motivate clients to actively promote their advisor's services.

How Referrals Help Scale Your Advisory Practice

Referrals are a powerful testament to an advisor's expertise and the quality of service they provide, offering an authentic and trustworthy endorsement that potential clients are more likely to heed. When satisfied clients refer friends, family, or colleagues, it validates the advisor's work and opens the door to new business opportunities.

They serve as a testament to an advisor's credibility and expertise within their network, enhancing their reputation and positioning them as a trusted financial partner.

As the number of satisfied clients grows, so does the potential for more referrals. This positive cycle of word-of-mouth marketing can lead to exponential growth, allowing advisors to reach more clients without increasing marketing expenditures significantly.

How to Maximize Referrals: 10 High-Impact Tactics

A solid referral strategy can be a cost-effective marketing channel, reducing the need for expensive advertising or lead-generation efforts. By tapping into existing client networks, advisors can access a pool of new leads who are already predisposed to seek financial guidance. Here are ten ways to kickstart your referral strategy initiative.

1. Clearly Communicate Your Services and Value

The best place to start is by building a practice people want to promote. Delivering outstanding financial support while achieving positive client outcomes will naturally encourage them to refer others who may benefit from similar financial guidance. But, sometimes, that’s not enough. Are you making it easy for them to brag about your services?

We want your clients to know how to promote your practice. Sharing your service model and fee schedule with them helps highlight your value for existing clients and gives them the phrases and tools to be ambassadors for your business.

When sharing your service model with clients and prospects, you can include a personal email or letter that mentions that you are always adding more offerings and enhancing your services and that if they know anyone who can benefit from these services, you are happy to meet with their family members, friends, or colleagues.

2. Ask for Referrals

Don't be afraid to ask satisfied clients if they know anyone who could benefit from your services. Don’t beat around the bush or put too much pressure on your ask; a simple referral request during a phone call or video session can lead to valuable new prospects.

3. Establish a Referral Program

Show how much you appreciate a solid lead. Create an incentive-based referral process where current clients receive rewards, discounts, or other benefits for any new clients they refer to your practice.

This can then be paired with a technology-forward website, like theAssetMark WealthBuilder Digital Prospecting Tool.

4. Send Personalized Thank You Notes or Gifts

A thoughtful show of thankfulness acknowledges their effort while reinforcing the value of referrals. Consider using automation to send out an initial thank you when you contact a referred prospect so that your client knows you took action and appreciate their support. When clients refer leads that become new clients, show your gratitude by sending personalized thank you notes, gifts, or gift cards, if compliance approved.

5. Conduct Client Appreciation Events

Host events to  show clients how much their support means. Use these occasions to encourage them to bring a plus one, whether a friend or family member who might be interested in financial advice. This is a great way for the advisor to meet new prospects and start a new relationship. The AssetMark Business Consulting Team can assist with planning and follow-up associated with client events.

6. Utilize Social Media

Engage with your clients on social media platforms and share valuable content regularly. Encourage clients to share your posts and recommend your services to their network. Great content that people want to share makes it easy for your audience to help expand your network.

7. Seek Online Reviews and Testimonials

Positive reviews and client testimonials (or case studies) can serve as powerful outreach materials to help convert potential clients who research your services online.

8. Focus on Niche Markets

Target specific niche markets where you have expertise and success. Satisfied clients within these niches are more likely to refer others with similar financial needs.

9. Develop Business Relationships with Other Professionals

Collaborate with other professionals, such as accountants or attorneys, and ask for referrals from their client base. You should know who your key Centers of Influence (COIs) are—the people who hold some weight as professionals in the community and endorse your practice. These business owners can become part of your professional network, supporting your practice by encouraging their own customer base to use your services.

10. Offer Educational Seminars and Workshops

Host educational events that showcase your expertise or provide valuable information from your COI. Next-gen clients (adult children of existing older clients) are a great group to target because a lot of younger people have not yet developed much experience in managing their finances. These seminars or workshops help establish your credibility and encourage attendees to refer others to your practice.

7 Client Referral Best Practices

There are some key rules to follow when asking clients for referrals if you want to keep the momentum going. Implement these seven best practices to create a referral-friendly environment, strengthen client relationships, and attract new clients through the power of word-of-mouth recommendations.

1. Deliver on Value Proposition

Ensure that you consistently deliver on your value proposition and provide exceptional service to your clients. Satisfied clients are more likely to refer others to you—plain and simple.

2. Listen to Your Clients

Build and maintain strong relationships with your existing clients, centers of influence, and professional contacts. Stay in touch regularly and show genuine interest in their financial goals and well-being. Listen carefully to their feedback so you can create a practice that they are excited to promote.

3. Provide Educational Resources

Offer educational resources and content (like webinars and brochures) for your clients and referral sources. This establishes you as a thought leader and reinforces the expertise you bring to the table.

4. Return the Favor

Make a point to refer your circle and clients to some of your best referral sources. Identify your CIOs and make sure you are returning the favor when you can to reinforce these important relationships.

5. Follow up with Referred Prospects

When you receive a referral, promptly reach out, learn their stories, and provide personalized attention to foster trust and confidence. You can then demonstrate how your services can help them achieve their financial and personal goals.

Following up shouldn’t just be once and done. It’s important to nurture the relationships. Maintain a prospect list in your CRM—an electronic database to hold prospect data without mixing them with existing client information, like Redtail (ask about the AssetMark discount). This pool of prospects can be automatically contacted monthly with relevant and even personalized marketing materials and drip campaigns.

You want your existing clients to feel confident in continuing to recommend you, so be highly responsive to anyone they send your way.

6. Express Gratitude

Always thank clients and referral sources for their efforts in referring new business to you. A genuine expression of gratitude reinforces the value of referrals and encourages continued support. Offer incentives for solid business referrals so clients can get excited about the process.

7. Make it Part of the Conversation

Don't demand referrals. Give your clients space to think of good fits before making referrals to avoid wasting time. A big ask can create uncomfortable tension that isn’t necessary or helpful to your efforts. Instead, make the topic of referrals a regular part of the conversation, giving them resources to make the process easy and space to act when the time is right.

Scale Your Practice Effectively with AssetMark

Are you looking to grow your practice with an influx of new clients? By harnessing the power of referrals, you can scale effectively and establish yourself as a trusted financial partner within their communities.

AssetMark can help you assess your practice and implement solutions to support sustainable growth. We offer key resources, tools, and expert perspectives to help you save time and do more for your clients. Reach out today to find out how our team can help you meet your business goals.