Even after financial advisors have found excellent COIs to work with, it is all too common for them not to get a steady stream of high-net-worth client referrals or any referrals at all. A pervasive mistake is believing that accountants, lawyers, executive coaches, investment banks and any other possible COI is adept at introducing their clients to other professionals.
The hard reality is that the overwhelming majority of COIs are limited when it comes to their ability to refer their wealthy clients. It is not that they do not want to refer, for they usually do. It is more a matter of not being very comfortable with the idea or being capable. Their lack of proficiency, which is their problem, is also your problem.
The solution is for you to strategically help your COIs to regularly refer their best clients to you. Based on circumstances, a number of very efficacious ways can help to do this.
One proven approach is to educate your COIs on which of his or her wealthy clients would best benefit from your expertise. It is often important to move beyond money management in order for most COIs to see opportunities for you. At the same time, you need to help your COIs know what to say in explaining who you are and why you are being recommended. The more you can tie back to how you are positioning yourself and how this will be valuable to the client all the better.
The easier you make things for your COIs, the more likely you will see potential clients. By taking these actions, you will significantly benefit from the transfer from the COI to you of “client trust and goodwill.”
Failing To Ensure There Is A Strong Economic Inducement To Refer You
Doing a great job for a COI’s wealthy clients is commendable. But how many other financial advisors can that COI turn to who would be able to do an equally great job? Certainly not every financial advisor is of equal value, but a lot of them are.
Doing a great job should be considered table stakes. You also need to incentivize your COIs. You need them appropriately motivated so they are actively looking to refer their wealthiest clients to you and will go outside their comfort zones to make referrals.
Helping them become more financially successful is—for the overwhelming majority of COIs—the answer. Your ability to help them grow their practices and translate that into greater personal wealth for themselves is the best economic inducement for them to refer their best clients to you and only you.
You can help them build their practices in a number of ways. Referring your wealthy clients to them works, but is rarely sustainable. Instead, one of the most powerful approaches is to help them become the experts the wealthy want to work with. You can help them become thought leaders. Again, you can follow a systematic set of procedures to enable your COIs to become thought leaders within a specific ecosystem.