The biggest benefit for an advisor in working at a bank is the potential for internal referrals. After all, this is an industry with more than 1,000 companies that offer employment opportunities for advisors.
Drilling down a bit further, we find that there are roughly nine different models (wirehouses, regionals, banks, independents, insurance companies, hybrids, boutique planning firms, RIAs and discount firms).
Within these models, there are three sub-types.
First, there are firms where it is up to you to find leads and prospects. This includes the vast majority of firms. The second type is the banks. Banks come in all shapes and sizes and not all are created equal. Good banks provide an advisor with a constant stream of warm and hot referrals. Lastly there are the discount firms. These firms typically give advisors clients, but they are usually on a salary and bonus structure.
So if an advisor decides to make their professional home at a bank, he or she should expect to receive a constant stream of referrals and warm prospects. But some banks do a better job than others in keeping that stream flowing. The biggest reasons these advisors struggle is because they are either at a bank that is more service driven or the advisor has not figured out how to convince their banking partners to give them more referrals.
One thing advisors should do is remember the sheer number of potential sources for referrals they have at their fingertips. Say an advisor covers four branches and each branch has seven employees, then there are 28 possible referral sources within their branches alone. And outside the branch, there are also many more referral sources: commercial lenders, mortgage originators, merchant services sales people, business development officers, private bankers, trust officers and many more bank executives.
Many bank-based advisors do a poor job of utilizing all internal referral sources. Here at the Rummage Group, we constantly speak with bank advisors who are not getting enough referrals. They often blame everything but themselves. I don't think most of them view their role as a bank- based advisor correctly. If these banking partners are the ones that provide them with referrals, this means in essence, that they are also clients. It is the advisor's job to cater to them and convince them to send more referrals. An advisor must always remember most referral sources are a little protective of their clients. They feel if they send an advisor a referral and the ball gets dropped, it will reflect poorly on the them. Indeed, the banker may even lose their client over the advisor's mistake. Knowing this, the advisor can act accordingly to put their minds at ease (and never drop the ball).
There are three things that must exist for an advisor to get more referrals. Even if the referral source has no monetary incentive, they will still send referrals based on the following three qualities.
GET THEM TO LIKE YOU
Never underestimate the power of rapport building and how likeable you are. All advisors should spend time building rapport with each client, and it is even more important to do so with your referral sources.
Consider this: When you secure a new client you get the revenue from one client. When you secure a relationship with a referral source, you potentially get the revenue from all of their clients.
Likability is very important part of this. The second we meet someone new we start deciding if we like them or not. Over time, even if we did not like a person at first, they can win us over. Even if a banking partner is pushed by the bank to give you referrals, if they don't like you they will be hesitant. Everyone likes people who make them feel good. So start killing your referral sources with kindness. Get to know them, their interests and their families. Try to remember if the referral source has kids and ask about them by name. If they are into fishing, maybe you could share a fishing story with them. This all sounds very simple, but very few advisors take the time to build rapport.
Make sure you always thank your partners for the referrals they provide. Go the extra mile and explain how you helped the referral. Let the referee know how your help put the client in a better financial situation.
In summary, be your referral source's friend, know their interests, care about them and you will get more referrals.
GET THEM TO TRUST YOU
Trust is also a very important quality. If a teller gives you a referral and you drop the ball, they will hear about it from the client every time they come into the branch to make a deposit.
You must always do what you say you are going to. Anyone who has been cheated on in a relationship will understand how powerful trust can be. In many cases you can be forgiven once, but not a second time.
In addition, the referral source will never forget your error. Always do what you say and remember that your actions reflect on the individual that provided you with the referral. If you turn off or hurt the client, you are hurting the referral source.
GET THEM TO RESPECT YOU
Respect can mean different things to different people. What I am referring to is your knowledge of the financial planning business. Referral sources like to feel that you can really help their clients. They need to feel you are a financial planner and not just a product salesperson. If your philosophy is to just sell a product and move on, you are less likely to get referrals. You need to show you care about the client's needs and will leave them better off than you found them.
Would you be more inclined to send a referral to an individual who had an in-depth knowledge of their industry, or one who seemed to make things up as they went along? Again, your actions mean a lot to your referral sources. Spend time educating them about financial planning. Dazzle them with your knowledge of your craft.
When they are impressed with you, they know their referrals will be too. Have sales meetings monthly and make sure you cover various financial planning topics. Try to make your referral sources feel like they are doing their clients a disservice by not referring them to you.
In summary, your actions have consequences. If you are not getting constant referrals from your banking partners, maybe it's you and not them.
Here's what you should ask yourself before getting started: Do you know how many potential referral sources you have? Can you list them by name? When is the last time you spoke to them? How much face time have you given them? Have you given them any referrals and can you name what kinds of referrals they are looking for? Can you name one interest that each has? Have you followed up to thank them for every referral? How much time have you spent educating them about financial planning? Do you have each of them in your contact manager system? Have you ever called them on their birthday?
If you answered "no" to most of these questions, I would say you have a lot of work to do. Getting your sources to like you, trust you and respect you will get you more referrals and ultimately more business — if you play your cards right.
Rick Rummage is the founder and CEO of The Rummage Group. He can be reached at rick@therummagegroup.com.
