For those of you who read this blog regularly, the idea that you don’t meet most of the referrals that are made won’t be new.

For clarity, about 42 percent of clients say they provided a referral in the last year; advisors report meeting referrals from about four percent of clients. That data comes from our on-going investor research, in partnership with the Investments & Wealth Institute.

That gap, of course, is remarkably frustrating but it’s also a stunning opportunity.

And the big question is 'why'.

A Distinct Lack of Introductions

You don’t need to look much further than your clients for the answer. They say they are ‘referring’, but the definition of a referral ranges from a passing mention to the equivalent of driving a friend or family member to your office.

Here’s what we know.

Q: Which of the following best describes how you made a referral. (Asked – obviously – of those clients who said they provided a referral.)

We’ve always known there is a big difference between a referral and an introduction but the results make that painfully obvious.

So what to do?

The Elephant in the Room

We’ve shared many referral tactics over the years, but there is one idea we haven’t shared. What if you simply addressed the issue outright?

Consider this conversation.

“I was reading an industry report recently and saw something that surprised me. It was a study of investors across the country and found that a high percentage of clients provide referrals to their advisor. That was obviously great news. However, it also showed that only one in four of those referrals are introductions. It turns out we only meet about 10 percent of the referrals that are made.  

I’d love to ask your opinion on that. If you wanted to introduce us to a friend or family member, how would you go about that?”  

Depending on the answer, this creates an opportunity to suggest that a simple email introduction is often the best bet.  

Keep in mind that the client referred to help a friend or family member so this isn’t ‘pushy’. You may want to take the opportunity describe your referral process here so clients understand what happens if they do make an introduction. You can find more information on that here.

Thanks for stopping by

Julie

P.S.  You can access the full report here.