As a financial advisor, one of the most valuable sources of new business is through client referrals. In fact, Advisor Coach reports people are 400% more likely to become a client when referred by a friend. Furthermore, 58% of high-net worth investors claim they found their advisor through a referral.

Referrals are powerful because they come from people your clients trust and who trust you. Not only does it help bring in new clients, but it also provides validation from existing clients who are happy with the services they receive. However, generating referrals can be a challenge, especially when it comes to high-quality, consistent referrals.

Here are some tips to help:

1. Offer Excellent Service: The foundation of a successful referral strategy is providing exceptional service to your existing clients. If you have helped a client achieve a goal, feel more secure, or solve a problem, then why wouldn’t you ask them if there is someone that you can help? When delivering top-notch advice and guidance, your clients are more likely to refer their friends, family and colleagues to you. 
2. Ask for Referrals: Research suggests that less than 20% of advisors actively seek client referrals. This may seem obvious, but asking for referrals is a vital step in securing them. For example, you could say, “I really appreciate your business, and I’m glad you’re seeing the value of our planning sessions. Is there anyone in your life we can extend that value to and also help achieve their financial goals?” Start thinking of referrals as part of your overall marketing strategy. Too many financial advisors rely on “accidental referrals,” which is not the best way to build your business. The lifetime value of a referred customer is 16% higher than a non-referred customer. 
3. Network: Attend industry events and join local business organizations to meet new people who may be in need of financial advice. Inviting your clients, their family and friends to a social event can also help build personal relationships and is a great way to maintain consistent contact. 
4. Keep in Touch with Current Clients: Regularly reaching out to your clients and maintaining open lines of communication will help you stay top-of-mind and foster strong relationships. Scheduling semiannual meetings to discuss changes in their financial plans is a great way to keep in touch. Don’t forget to thank your clients on a regular basis; a short phone call or a handwritten card goes a long way. This will increase the likelihood of them referring you to others in the future.
5. Build a Strong Online Presence: Develop a professional website, maintain an active social media presence and consistently produce valuable content that your clients will find impactful. Creating and sharing educational information builds rapport, credibility and trust. A strong online presence will help you leverage the networks of your existing clients, allowing you to reach and engage with a wider audience.
6.  Establish a Referral Program:  Create a referral program that outlines how your clients can refer new business to you and the benefits they will receive for doing so. Rewards can be monetary, (such as a discount on fees) non-monetary (such as a gift card or free financial planning session) or a combination of both.

In conclusion, obtaining new clients through word-of-mouth marketing requires a combination of effort, persistence and a commitment to providing excellent service. Keep in mind that referred customers are 3 times more likely to refer their friends to your brand and have double the lifetime value of non-referred customers. By following these tips, you can increase your chances of securing valuable referrals to drive the growth of your business. 

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