Should financial advisors periodically ask for referrals, even in a soft manner, in letters, newsletters, appreciation cards, referral clubs, client surveys and client advisory boards?

Terrance Martin, managing partner at Tranquility Financial Planning LLC in McAllen Texas, thinks that it is important for advisors to periodically request referrals.

He says he has seen and heard of firms that do a number of the following: send out emails and letters to clients, offering their referrals a second opinion; invite clients and their referrals to summer client events and make a conscious effort to personally greet them as well as any guests; and send out tax letters in October letting their clients and prospects know that they can prepare a complimentary tax projection for them or anyone else who they think would benefit from their services.

“It’s all about lead generation,” Martin says. “However, it is important to clearly define the client you want to attract in whatever medium you use.”

Ronsey Chawla, an advisor at Per Stirling Capital Management LLC in Austin, Texas, prefers to ask for referrals during face-to-face interactions with clients, such as during the annual review or critical checkpoints with the client.

“I tend to frame the discussion around problem, value and service,” he says.

“I talk about the key areas in which we have collaborated this year and work that I have done for other clients. I ask them, ‘Are there any other physicians or management consultants who may benefit from this type of hands-on approach?’” Chawla says.

“It is with the benefit of time that the relationship grows, trust is nurtured and clients feel comfortable sharing positive experiences with friends and colleagues,” he says.

Although Arthur Stein, president of Arthur Stein Financial LLC in Bethesda, Md., uses monthly letters, email notifications of blog posts, phone calls and personal emails to stay in touch with clients, he doesn’t include a “please send me a referral” note at the end.

“It strikes me as too ‘salesy’ to have a line in my emails,” he says. “I am not sales; I am an investment manager who also does sales and marketing.”

However, Stein does ask for referrals when clients express satisfaction with his services.

“It is not a formal system, just asking whether they have friends, family or colleagues who could benefit from the same services,” he says.

Katie Kuehner-Hebert is a freelance writer in Running Springs, Calif. She has contributed to American Banker, Risk & Insurance and Human Resource Executive.

This story is part of a 30-day series on how to generate the best referrals.

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