Getting referrals isn’t just a numbers game.
Financial advisors must get the right referrals, and that means casting the right net in the most appropriate waters for a given practice.
“The No. 1 thing when you’re talking about referrals is that you want to be onboarding clients that you want to duplicate,” advisor Kay Lynn Mayhue says. “Really evaluate the clients that you are bringing in to your business, and make sure that they’re the right type of clients in the first place.”
They are likely to refer an advisor to more clients like themselves, says Mayhue, CFP and president of Botsford Financial Group, a registered investment advisor with offices in Atlanta and Dallas.
“If you’re bringing on clients that are not necessarily the clients you want, then you could be doing yourself harm,” she says.
For example, advisors who position themselves as experts through writing and media appearances may find that they get widespread interest. National media attention might be great for the advisor’s reputation, but it could reach geographically inappropriate clients.
“The best way to broaden our impact is through our clients introducing us to friends, family and colleagues that can benefit from our services,” Mayhue says.
“That’s because our clients know what our services are and know the type of clients who would be attracted to what we offer, versus someone calling in, and saying, ‘I heard about your book, but I really have no idea what you do.’ It’s just a better way for us to have manageable growth,” Mayhue says.
The best way for advisors to get the clients they want is to be themselves and to incorporate their own interests into their practices.
“Like life in general, you’re going to attract people that are like you,” Mayhue says. “If you stay true to yourself, you’re going to be meeting the right clients and attracting the right clients.”
Staying true to oneself means recognizing and playing to personal strengths and expertise.
“If you’re a Jack of all trades, your brand, your identity could get diluted,” Mayhue says.
Specialization can be a key to successful referrals, says Russ Thornton, whose Atlanta advisory firm, Wealthcare for Women, is part of Wealthcare Capital Management, an RIA in Richmond, Va.
“In a more generalized practice, it could be argued that everyone is a prospective client on some level,” he says, adding that by narrowing his advisory’s focus, he can better concentrate his efforts, attention and time.
“I can be much more deliberate about the people, groups and online activities that will most likely lead to positive results with the women I want to meet and work with,” Thornton says. “Before, I felt like I had much less direction and focus, which sometimes can be overwhelming when you sit down at your desk to work for the day.”
Paul Hechinger is a New York-based freelance writer.
This story is part of a 30-day series on how to generate the best referrals.