4 tactics for turning client referrals into introductions

While a recent survey found that 92% of clients expressed some inclination to continue working with their current advisors, that same study also uncovered frequently overlooked opportunities for advisors to build a client’s confidence. Developing an understanding of your client’s needs is paramount and will have many benefits, including increased referrals, according to the experts.

Advisors who focus on enhancing client confidence can positively impact traditional metrics and increase client satisfaction. “Client self-confidence is an insidious form of risk because it is tied to satisfaction, loyalty and Net Promoter Score,” according to Julie Littlechild, founder and CEO of Absolute Engagement, which conducted the 2023 investor research survey, which provides insights into the current state of relationships between advisors and their clients and identifies areas advisors can focus on to add value and grow.

In addition, the survey noted that 43% of clients cited the greatest benefit of working with an advisor as gaining a clear vision of the life they want in retirement. However, only about half of the clients indicated that their advisor has helped them strategize or plan for nonfinancial goals such as health, fulfillment after leaving the workforce, quality time with family and friends, or new experiences such as travel.

Consistent with previous years, the survey indicated a considerable gap between the percentage of clients who are satisfied with their advisor (93%) and those who take the additional steps of referring other consumers to their advisor (35%). Age and financial acumen seemingly play a role in driving referrals, with younger clients and those with a higher level of financial literacy more likely to recommend their advisors, the survey said.

Also, clients who are inclined to share their concerns with their advisors tend to make more referrals, underscoring the importance of deepening relationships to reveal client worries, according to the survey.

“While 35% is a very high number, the reality is that advisors typically report receiving referrals from fewer than 5% of their clients,” noted Littlechild. “This highlights another gap and an opportunity to translate referrals into introductions.”

Transforming client referrals into introductions

So how can advisors transform client referrals into introductions? Bill Cates, president of Referral Coach International, shared the following strategies and tactics designed to help advisors accomplish this important goal.

Tactic 1: Be “assumptive” about the introduction. Cates does not believe advisors should assume that a client is willing to give them referrals; that’s too aggressive. However, he said, once a client is open to recommending his agent to one or more people, the agent should assume that an introduction will be created.

Example: “George, let’s discuss the best way for you to introduce me to Laura,” or “George, I suspect Laura would prefer to hear from you before she hears from me. I have a very efficient way to do this that I think you’ll find comfortable.”

Tactic 2: Make it about protecting the relationship. Probably more than anything else, clients and centers of influence want to protect their relationships, Cates said. They want an introduction that feels safe for all parties concerned. It needs to fit the relationship and the personalities. “Don’t force a particular style on other people,” he said.

Example: “George, when you think of someone you believe should know about the important work I do, let’s discuss the best way to make that introduction. I want this process to feel comfortable to everyone involved.”

Tactic 3: Make this a collaborative process. In an effort to make this process feel comfortable and safe, advisors do not want to lose the chance of it also being effective. In fact, an advisor can even say something like the following to their client:

Example: “George, when you think of someone you believe should know about the important work I do, let’s work together to find the best way to make that introduction. First, I want this process to feel comfortable to everyone involved. Second, if we’re lucky, we can spark their interest in hearing from me.”

Tactic 4: Take your time, do not rush, and learn about your prospect. The more advisors learn about the prospect, the more relevant they can make the client’s introduction as well as their follow-up to it. “If you legitimately run out of time in a meeting, finish up over the phone later that day or the next day,” Cates said. “Slow down. Be confident. Get connected in an effective manner.”

Example: “George, before you make this email introduction to Laura, I’d like to learn a few more things about her so we can create a relevant introduction as well as my follow-up to that. I know we’re out of time right now. May we schedule a 10-minute call to finish up this conversation?”

‘Supporting client needs’ most important

“Traditional metrics have been the cornerstone of advisor performance evaluation for decades, but they are based on lagging indicators,” said Littlechild.

“To deepen relationships and improve advice engagement, our industry must prioritize understanding and supporting client needs as the true measure of success,” she explained, adding, “Advisors who prioritize supporting clients’ life goals, not just financial goals, are poised to thrive in the coming decade.”

Kathleen Owings is one advisor who knows the importance of deepening client relationships. One way she does this is by hosting a weekly video with new content each week, according to Owings, principal and financial advisor with Westbilt Financial Group. The firm has been doing this for several years.

“We talk about our business, current events, market commentary or general financial advice,” she said. “It has been a great way to connect with clients each week. We have some clients who watch it consistently and comment back to us. It has been an easy way to stay in touch with our clients on a regular basis.”

Absolute Engagement’s proprietary Self-Confidence Index, an integral part of the annual survey, also reveals that 31% of clients currently have low to moderate confidence about their finances, in large part influenced by market performance and concerns about risk.