Problems Asking
A study of 258 financial advisors in 2013 found they tended to get fewer than three referrals from their clients per year. In delving deeper into the matter, we found that the financial advisors were not motivating their clients to provide them with referrals.
Most simply failed to ask (Figure 3). And if they don’t ask, the odds are pretty good they will not get a referral.
A substantial number of financial advisors dislike asking for referrals. In Figure 4, we note some of the major reasons. Topping the list is that they are uncomfortable asking. After that, they say “the opportunity did not present itself.” (What many advisors need to understand is that they have to create the opportunities.)
They also said they do not want to make the client uncomfortable or harm the relationships. This rationale speaks to the quality of the relationships. It begs the question, how much of a trusted advisor is he or she?
Further complicating things is the way they ask (see Figure 5). The least used approach—“To ask about a specific individual you know the client is close with”—is identified as the most effective.
While this particular study of financial advisors was not focused on affluent clients, we have found that asking for introductions from the wealthy is even more difficult, for many of the same reasons noted here. Since these affluent clients are often very important to the profitability of a financial advisor’s practice, there is a strong desire to tread carefully around them, and the idea of asking for referrals makes many advisors especially anxious.
Conclusions