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Why — and how — advisers should ask for referrals

BOSTON - Referrals may be the engine that generates net new assets, but too many advisers are afraid to ask for them, according to one expert.

"Asking for help is seen as a sign of weakness," Bill Cates, president of Referral Coach International, said at LPL Financial's annual Focus conference. "But it shouldn't be. Asking for help is actually a sign of strength."

Cates, who has worked with advisers for over 25 years, estimated that while 20% of an advisers' clients will give a referral without asking and 20% will probably never make a referral, around 60% of clients haven't been asked properly.

"That's your opportunity," he told advisers at a session on how to attract high-net-worth clients.
Cates advocated asking clients for an introduction as opposed to a referral. "An introduction is a more actionable connection," Cates said.

Ideally, he added, advisers should want clients to be their advocates. "Being insistent and engaged is really the top of referral hierarchy," Cates said.

One of the best ways for advisers to get a referral is to engage clients with a personal story, he said.

"Tell them why you got started in the business, why you're still in the business and why you're with your current company," Cates suggested. "People want to know about something that happened to you or to a friend, and how you helped them. But this can't just be a technique. It has to be genuine."

When asking for an introduction or a referral, Cates told advisers to make sure clients recognize the value you place on the request and how important it is to you. He also recommended asking for a clients' permission to brainstorm about potential referrals and to suggest names and business categories that may be appropriate.

"You want to make the process as collaborative as possible," he said.

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