Other professionals need a number of reasons to refer their affluent clients to you. They have to strongly believe that you’re going to do an exceptional job for these people. And they have to be confident in your abilities and commitment, since their own important relationships with these individuals are on the line. Other professionals also have to “connect” with you. There has to be chemistry.

Yet these strengths alone are not enough. A lot of financial advisors have them. So for other professionals to refer clients to you, they need financial incentives as well.

There are two types. Direct financial incentives generate revenues for the other professional immediately. Indirect incentives are “business building” and are more powerful long-term motivators. You’ll get the best results when you combine the two.

Direct Financial Incentives
There are a number of ways financial advisors can provide direct incentives. The three most pervasive are:

• Trading affluent clients. As it turns out, while appealing, this approach is the most ineffective long-term way to build a greater affluent clientele.

• Sharing your revenues. One of the very best ways to motivate people is to give them a percentage of the monies you generate providing your expertise.

• Paying introduction fees. While these fees are not tied tightly to revenues, the idea is that you pay the referring professional a fee for connecting you with an affluent client.

Direct financial incentives are quite powerful. They clearly and unquestionably help other professionals achieve their own financial goals. But the difficulty is in execution. Most advisors’ attempts to use direct financial incentives prove to have limited effectiveness.

In a survey, we found that trading affluent clients had been the most effective form of direct financial incentive over the previous 12 months. (Using a number of criteria, we developed a scale going from “1,” not at all effective, to “10,” extremely effective.)

However, based on previous research, over time trading clients often quickly loses its effectiveness.

While it’s important to consider these direct incentives, they are often not enough.