Having spent a decade or two in this industry, I've met some extraordinary coaches. They work hard for their clients and help them accomplish great things. And yet, despite the fact that I know many coaches and think they do great work, I don’t think I make that many referrals to coaches. Curious. Or, perhaps not. There is a lesson to be learned about referrals if we examine the facts - so here goes. I regularly speak with advisors who tell me about their specific challenges and many also say they are looking for help. There is need and there is motivation. As a result, you might think I would respond by providing a list of coaches the length of my arm and yet I struggle. I struggle because I don’t know exactly who would be the best coach to help that advisor solve his or her specific problem. Too often the coaches that I come across say they can help with ‘practice management’ or ‘growth’ or some other general topic. That’s all very nice but it doesn’t help me refer because nobody defines their problems as practice management or growth. As an aside, there are many coaches or consultants that don’t fall into this trap. Stephen Wershing helps advisors to increase referrals. Kelli Cruz helps advisors to structure meaningful compensation plans. There are others, but I talked to them both this week so they are top of mind! This isn’t, however, a post about coaches. I want to talk about referrals and, more specifically, what really gets in the way of referrals for you. Your clients face the same dilemma as I do when I think about coaches. If everyone is your target, no one is your target.

Clients Tell Us Why They Don’t Refer

We know that clients are comfortable referring. Based on on-going research with investors we've found that 78 percent of clients are 'somewhat or very comfortable' providing a referral to their advisor. That’s good news. We also know that about a third of clients say they have referred in the last year. That’s even better news. If we focus on the two thirds of clients who did not refer (despite their comfort level) here’s what we find.

‍Q: Which of the following best reflects why you have not referred?

It has become accepted wisdom that the reason that clients don’t refer is because they are uncomfortable talking about finances with friends. And while that is true for some, they are clearly in the minority. Sixty-four percent of clients say they haven’t met anyone who they thought needed a financial advisor. The question, of course, is whether they actually recognize that need.

What Can You Do to Help Clients Refer?

In order to help clients refer we need to do a much better job of helping them think of you when the time is right – while they are discussing challenges, fears or dreams with their friends and families. The key is to get specific. When I’m with friends I don’t talk about “my financial life”, but I might talk about:

• Caring for an aging parent,
• Helping my son make good financial decisions, or
• Making sure my family will be ok if something happens to me

Real people talk about marriage, births, deaths and divorce. They talk about how they feel and what worries them. These conversations are your referral opportunity but only if you have helped your clients to understand that you can solve any of those specific problems.

Are Clients Referring to Other Professionals?

As an aside, ours is not the only industry with a referral challenge. While we might want to assume that the grass is greener on the other side, clients tell us they simply don’t refer that often. Just 18 percent of clients say they regularly or often refer to anyone, let alone their financial advisor.

‍Q: How often would you say you provide referrals to friends and family in general (e.g. beyond your financial advisor)?

Your clients are willing to refer and they want to help their friends and family. You really have one job and that is to tell them about the problems you solve in more specific terms. More importantly, use the words that real people use when they talk to one another and stay away from anything that you might see on a brochure. Your clients will refer to help their friends. You just need to help them spot the opportunity.

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Thanks for stopping by,

Julie