I don’t think most clients know their friends financial situation well enough to identify them as prospects for me.

Clients will only refer if they think their friends need help

Clients are not on the look out for prospects

It’s really a matter of trust and gratefulness to get a recommendation. I am thankful for every client who recommends me.

Good points and I enjoy your commentary. I have had the odd referral here and there, and generally from clients you wouldn’t expect. My opinion is you shouldn’t have to ask for referrals (personally I have experienced that from a hard sales air con guy – suffice to say he was exited quickly), but you should create an atmosphere of wanting to help people, help their friends and family, and be trusted to. I am a firm believer in that if you give good service, advice and care, then the results will follow themselves. I’m not going to refer any of my friends or colleagues to an adviser (in any profession) if I don’t feel they will get a good experience. So in essence, I think people don’t refer due to a fear of getting it wrong, or not trusting their Adviser sufficiently.

1) We work in a high-trust business. We’re not selling dry cleaning services, window blinds, or lawn maintenance. If one of their friends has a bad experience, it could ruin a relationship for life. A dry cleaner damaging a sweater is not going to ruin a relationship. Referrals to an advisor is high-risk proposition in their minds, and probably not worth it even if you’re a good advisor. Not to mention, talk of money is a VERY personal matter even for the closest of friends and family.
2) When a client does try to refer they can experience rejection. “Well, I have a person that does for me”. “I have a great guy too.” Or whatever. No one wants to feel rejected so they don’t refer.
3) Client may believe it’s not their job to help grow your business. In their minds they might be thinking, “Hey, aren’t we paying you enough? You mean we need to help you grow your business on top of paying you? They’re not going to say it out loud. They just won’t refer. The book “Stop Asking for Referrals” discusses this topic in detail.
4) Unless a person is going through a life-changing event such as retirement, divorce, changing jobs, etc. then likely client the will not be able to think of anyone to refer, thus making the conversation uncomfortable and awkward
5) Some people are just natural referrers. We get most of our referrals repeatedly from the same clients

As always ronald, you are raising the right questions! Keep going! 🙂
Thomas

Goodmorning Ronald,

I struggled with the same problem. Feedback Marketing (Dan Allison) has enabled me to look at my practice in a totally different light. . . I finally understand that to know what my prospects want from me, all I have to do is ask them.
Kind regards, Wil

Many don’t refer because they are not comfortable to talk about anything to do with money issues with people close to them.

They don’t refer their friends mainly because I am afraid to ask for a referral. I would love to get better at this.

I believe because discussing money and wealth with friends is not really the done thing and they don’t want to lose face if they have a bad experience.

Some clients want to keep you all to themselves as well.
Others feel their friends “can’t afford you.”
Others only think from within their own circumstances, “oh, bill isn’t in my position, so doesn’t need advice.”
Others need to see you’re reliable for a year or two before offering you up.

I try to explain at the end of the day I am a business and I need to grow so would love to help other people just like you.
I also explain that I want to focus fully on clients and if they can help me then its a win win.

Lots of interesting ideas in the comments, basically we need to ask and not by embarrassed.
I asked one client how he would explain to his friends when he was debt free why he didn’t mention me earlier. He couldn’t answer.

Many of us have an innate reluctance to ask for referrals. Clients have that same innate reluctance to give out names, in case there is a downside to their relationship. Good service is one thing, being relateable is another. Also sometimes there needs to be something in it for some people. While I fall into the category of hating to ask for referrals, I try to build that expectation in clients from the time I first meet them, but don’t ask directly. I want to know what makes them tick, why they came to me, even if I know they were referred and what they expect from me. I too would like more referrals, as that is the only way I bring in new business now. The client does have to see value, but clients also often forget, once the deal is done, seeing you as just a cog in the chain of their progress.

Some people feel it’s too intrusive to get involved in their friend’s financial matters.

I have had several clients say they tell their friends they should use me and they are disappointed by their friend’s apathy. I always say when they have a problem and are complaining that will be when they will get in touch. So I have started taking the approach that most people won’t go for a check up they wait until the car warning light comes on or they have the tooth ache. Same with making the most of your money. If it feels Ok why bother? When your friend is having a tough time or is worried or life changed that the time he will listen.

It\’s scary talking money with friends. The vulnerability they feel leads many people to stretch the truth of their financial expertise and success. Hence, there is trepidation about referring friends to someone who knows the truth about their finances.

Hi Ron, in my opinion, most folks receive a so-so experience. My dentist, Doctor, and insurance agent all provide a decent service, but it\’s nothing remarkable. If someone asks me who I use, I\’ll tell them, but I don\’t go shouting it from the rooftops because it\’s nothing out of the ordinary.

Lack of value addition because financial planning is not just number game.

Hey Ron,

In my experience, the most common reason why clients don\’t refer is that they never talk about money problems with others and they assume their friends are already looked after by someone. They don\’t realise that the vast majority of people is lost and would appreciate a helping hand they can trust.

I believe that the overwhelming reason that advisors don\’t get referrals is because we don\’t ask. Or when we do ask, we do it such a way as to make the client uncomfortable.

They are uncomfortable talking about personal finances with others; too private and personal.

I agree with all of the above.

Because they do not truly see the added value. They have just bought another product and not a solution to help them on their journey

Once our clients can articulate our value, they realize we provide a valuable service

Because we feel afraid or embarrassed to ask for referrals to a degree, at the risk of sounding \’desperate\’!

It\’s too personal !!!

The one of the most important reason I think, for not referring me to other people, could be that they might have not seen any value in my service that I am offering.

Because we don\’t ask with conviction

We spend a lot of time asking people questions and get quite good at making sure our questioning technique is consistent and repetitive. One of things Advisers (including me) are not regular and consistent about – is asking people for referrals.

In my opinion, people don\’t refer for two main reasons……..

Firstly, the person being referred to may think that he is being lined up for a sales call, and secondly, the good performance or other wise of the adviser will reflect directly upon the person referring him.

They are fearful or risking their own reputation on someone else.

Client feels that the benefit to the other person has nothing to do with them

I think I get few referrals because I don\’t make clients feel comfortable giving referrals. I think most referral scripts make clients feel obligated, idebted, uncomfortable.

Limited upside
Unlimited downside
Why risk a relationship with a friend?

I hesitate to request referrals from friends because I do not want to affect my friendship. I know that my service is a good service. I know that my service will help people. But there seems to be a stigma about friendship and business. I want to be able to call my friend over for fun and not have him be reluctant due to the fact that I may bring up business. Also, I am not in control of the corporation\’s performance. I promise quality service, but the corporations 800 number may not evoke the same service I promise.

They don\’t refer because they do not want to be responsible if their friends/family suffer a loss right away. The 2008/2009 downturn has many overly fearful.

Evening Ronald,
My guess (I never asked my clients…) is that they don\’t make a referral mostly because I don\’t ak them to, so it\’s safe and easy to do not. And yes, people talk easier about going to a movie or a restaurant rather than going to a financial planner.

I think money and sex are the two personal things that most people don\’t like to talk about so making a referral for a financial planner/adviser is a very personal thing to do.

People worry what will be inferred about them by making the referral.

About 85% of my business is referral but what I have found is people don\’t refer just people who could use my service they refer people in near identical circumstances to their own.

Looking forward to the PDF

Usually, the client does not feel comfortable giving recommendations with regards to financial advice. They deem this too private and too personal…

With the collapse of many fraudulent investment schemes as of late, clients do not want to refer an advisor that may or may not recommend an investment that goes belly up. There is a risk the client will be blamed for recommending the advisor who recommended the bad investment. Reputational risk leads to fewer referrals.

I don\’t have a consistent process which explains why referral is to everyone\’s benefit

The clients did not refer due to their habit. So we have to highlight to them. Generally, if you have solved their pressing issues then they will definitely refer their friends and family members to you.

People don\’t refer others because of fear. They think that if they say to someone that they are getting help it\’s an indictment of their own abilities. People want to portray a sense of control over important matters, it\’s the same reason people will go broke before seeking help themselves. People don\’t give referrals for the same reason they don\’t ask for recommendations.

Who I want to serve has not been properly communicated.

Financial planning service itself is something intangible and it\’s not easy for them to relate to it let alone share it with others compare to a tangible product.

Clients are too proper and too British. They feel it is stepping over a boundary to get into a detailed discussion about actual financial planning and their own experiences from a positive perspective. Conversely, they will talk about a good/successful product they purchased, although I agree that this is not the way to market financial advice.

My biggest problem is that I haven\’t worked out a comfortable way to ask for referrals yet. It still feels like begging to me most of the time.

There are defiantly a few reasons but main one is they don\’t feel that you provided the service they expected, therefore why would they refer someone else.
You haven\’t shown them the value of what you have done
You have asked them for a referral but not told them how you can help others and given them examples of how you can help.

My \”elevator pitch\” still needs to be improved. I want to be able to provide a short and convincing \”story\” about my added value to the customer. If this \”story\” is simple and convincing, the happy customer will be in the position to tell it to whom may be interested.
Probably, the \”story\” will be easier to be told, when the message is positive (less focussed on the problem, more on the desired state).

Because they don\’t know how to tell their friends to come on board.

Money in society is a taboo subject, just like religion and politics. They don\’t feel that it\’s their place to recommend a financial planner as other people\’s finances are private.

Do they feel heard, understood? Does meeting with me make them feel like they\’ve done some good things, or do they feel stupid because of financial mistakes? Have I created an experience for them that makes them feel good about what they\’ve done, and what they have to look forward to?

Clients sometimes fear that if the person they refer looses financially after advice from a financial planner it may have a permanent negative affect on their friendship. Don\’t risk it so better not to refer!!!

People refer only when they see demonstrated knowledge, advice and a sense that you really care about them.

Because, like you, they are busy people and so forget to refer colleagues & friends to you……so simply remind them……and often!

Because I did not ask them

Often I believe it is because clients can\’t adequately express the benefits they get from financial planning, so don\’t feel confident enough to articulate the value that comes from the relationship

People don\’t refer because they are afraid that a negative mpression will reflect back on them.

Because their heart was not touched, so they did not open their heart to me and everything I wrote.
So I am the one to blame….

They don\’t refer because they don\’t understand it and procrastinate.

People are very private when it comes to their finances and seem to protect their information, including their financial representative.

They don\’t refer because they are struggling with doing the \”right\” thing themselves and are putting off decisions until they are forced to react.

Much too often we \”forget\” to ask our clients and they, the clients are a little bit afraid or careful to recommend because they not sure about whther the relationship is also going to work for their friends or family. But on the other hand we still get new clients bij referal.

We hear from many, many, many clients that they have indeed referred our services to friends and family. They have provided our phone number and other contact info. But we seem to get very few contacts from those people. My guess is that no matter how much someone knows they need our services, the bottom line is that \’life gets in the way\’ and they just don\’t get around to contacting us.

They aren\’t being reminded by me that I can give others the same great service I I\’ve them and not to keep me a secret.

People won\’t usually recommend financial services because, where I\’m from, finances are considered an off-limits topic

Two reasons being that I don\’t ask often enough and secondly because I don\’t ask often enough. When completing a client survey most said they would but they don\’t. Why?? I don\’t ask often enough!

Cheers

I have one client that makes referrals often. She is a good money manager, very frugal and excited about saving. She is an exception to the rule. A lot depends on the financial personality of the clients and how comfortable they are to discuss financial matters.

I\’ve found the number one reason is we don\’t ask. I once gave ten cards to a client who had received a payout and told him to brag about me to his mates. I helped 10 of his mates with the same problem

Sometimes people just don\’t know how to approach it. First they need to be thinking about it, then recognise the need for it, then make the effort to bring it into conversation, then follow up. It could be that a Referal was made without the referrer passing on the planners details and or referree actually calling the planner when they said they would. I think the key is keeping it front of mind for clients and offer then an incentive to refer.

Because it\’s not like a restaurant or a shop where customers get immediate results or instant gratification.

I receive multiple referrals. It\’s all in the value the client perceives their friends and family will get if they refer to you. It\’s emotional, not results driven.

I don\’t ask. Shame on me

People don\’t refer because they don\’t want to be blamed or ruin a relationship if their referral has a bad experience with you. There is too much risk so people choose not to go out on a limb.

I am beginning to ask for referrals but I think people in general do not like to talk about money.

Plenty of clients say that they tell their friends and refer, but this rarely seems to translate into a newly referred client. It would seem that the message they are delivering to their friends is not enough of a motivator?

One client consistently refers me to her friends, family and work colleagues – I think she does this more than other clients because she feels so engaged with her plan and she\’s a lovely open person who is not concerned by admitting she has a planner. Other clients personalities are more reserved, and like to keep their finances to themselves

Maybe people don\’t like to talk about their financial \”problems\” with friends and family?
I lately started to ask for referals in social media.

Reasons that people not referring your financial planning service to their friends, because we don\’t tell stories and we deliver the usual expected services they wanted.

One\’s attitude towards financial planning is similar to one\’s attitude towards maintaining good health. People remember the doctor only when there are symptoms of bad health.
Clients refer their friends to me when they see them facing an important financial problem/decision.

People are nervous that their financial planner is useless and they are stuck in a ponzi scheme unknowingly.

I think that people have to show te result, without showing there financials. Maybe it\’s possible to add a presentation with pictures and no numbers.

People often don\’t want to get involved. It keeps their lives simpler.

People only refer if it will help their friend. If they don\’t see how we can help their friend, they won\’t be able to refer. And like it or not, some people just aren\’t wired to refer at all.

Most people are private when it comes to money & do not want to mix matters like that into their relationships.

I think people are becoming more reserved / conservative in offending others. By referring services the referrer risks any bad thoughts the receiver may have about the referred person, their services, industry, etc. That bad vibe is what referrers try and stay away from.

Referring is risky

I agree with all of the above!

I agree with many of the comments above. Unless the topic of finances/financial planning comes up when speaking with a friend, an individual is not going to step over that line and proactively bring up finances with a friend. I think when asked by a friend if they know of a good financial planner, your client will refer then.

we don\’t ask

They\’re uncomfortable because they feel they may look like salesmen.

They do not refer because there is no opportunity to do so.

Many of my clients are very private about their financial affairs and don\’t want to share information.

People say they don’t feel comfortable referring anyone since if I don\’t measure up, their reputation will be hurt.

they are scared to

I guess because of that sick mentality which people had build from ages.
You must have noticed, people who having financial crunches in their past life, would be more interested in financial planning.
Or those who know the value of financial planning.
So that is what we need, either let them fail or take courage to make them understand and notice.

In the UK people are shy about complaining – praising and referring. We have to give them the confidence that its OK to do all 3.
Generally we have to ask them for referrals and encourage them to provide the information there and then – if you leave then it may only rarely happen. Re-iterate your services and how you get paid and reinforce the positive of your service. Using a restaurant analysis its not just the food that makes a great evening but the ambiance the service and the overall experience. People then refer quite freely.

Because its a private, personal and sensitive topic and financial advisers don\’t have great reputations where I\’m based (Dubai)

We need to provide exceptional service to make them want to refer.

I generally find it\’s more likely to be the female clients who are more willing to refer. I\’m guessing this is because they care about their friends and not because they\’re turned on by financial products.

Hi Ronald, love your blog.

I believe it\’s as simple as clients not knowing that we want (need) referrals to keep our business running. I work for a large bank as a planner and it\’s a part of the banks role to have a line of people at my door, but they may not be ideal clients. Client referrals are generally good clients as they have been pre-qualified by your existing great clients. I\’d much prefer to have client referrals than bank referrals – now to find the time to see them both!

It\’s because we don\’t always provide a frame of reference. In asking to be referred to a friend we inadvertently may be providing too much choice, which in turns make it harder for our client to identify an \’appropriate\’ person to refer.

Privacy.

People don\’t talk about their financial situation with friends or family as it is private or greedy to talk about money.

Either they are not sure or they don\’t want their Friends to be successful too

Because finances are a sensitive subject and we are British!

Maybe they don\’t want to admit to their friends that they had to use someone to help them with their own finances, maybe a pride thing.

They are probably not sure that it would be suitable for their friends. Or maybe that they don\’t want people to know they use a financial planner for some reason!

Because I never ask clients for referrals.

Hi Ronald, Great article!

People will only refer if they truly believe in you and the service you provide. It\’s not about the PRODUCT, in fact clients are not really interested in which pension is best or this fund or that fund is giving the best returns.

I\’ve found that they want to maintain or get a better lifestyle and ensure that they enjoy it without ever running out of money. You do that with proper financial planning, listening to your clients, being genuinely interested in them and what they wants in life (life planning). Then you design a cashflow based financial plan (financial planning). And finally if products are needed to ensure the plan succeeds you then advise (financial adviser).

Using this model (its a great experience for the client) you get paid for the plan and products if needed. You also get great referrals.

The message of a financial plan is too personal in order to share it with friends. There is a risk friends might have an insight into the own financial situation.

they are afraid to refer beause they do not know how to present the concept

I think it\’s a British thing not to refer. Those clients who do refer me really appreciate what I\’ve done for them so I guess it\’s about impressing clients and showing you care and can be trusted.

People are embarrassed to show an outward interest in other peoples wealth, especially by recommending their financial planner to them.

Even if you are actively asking for referrals, I think the planner is such a personal advisor, like a therapist, that people might not want to share that role with another person in their life.

People don\’t feel comfortable talking about their finances. They did not expierence value.

I rarely ask.

1. I don\’t have a referral process built into my financial planning process
2. I don\’t make it easy for them (recently saw a referral card that seemed like a good idea)
3. They would probably struggle to articulate the valeu they received and therefore, might be reluctant to discuss with potentail referrals.

Getting referred business I feel is an art that a lot of people take for granted. I think getting people to refer is something that starts with the way we treat our clients and their honest opinions as to how we might treat their friends/families etc.
There are different avenues I am trying to enhance this aspect in my business.

They don\’t refer because they don\’t know I am seeking to be referred. They think I am quite busy and doing well anyways (which though is not true)

They don\’t talk about financial planning with their friends.

I think they don\’t refer because it feels risky.

Clients may have got a positive outcome working with you but are nervous about referring just in case their friends get a poor outcome. The consequences of referring a planner compared to a restaurant can be quite different!

They\’re afraid that their friend may not have a good experience with the advisor that they recommend. Therefore, it could damage their relationship with their friend.

Perhaps the adviser has not adequately expressed the value they have delivered and the client doesn\’t fully understand the value received. I\’ve seen plenty of unguided, non advised clients who have made poor financial decisions and seen the impact this has on their lives. Clients who have an adviser are significantly better off both financially and emotionally e.g in health and relationships etc. However, it takes time for clients to recognize the value and fully appreciate the value of advice.

Some clients like to keep their personal and financial lives separate from their friends

I believe the number one reason people don\’t refer is because we don\’t ask. I\’m constantly surprised with the amount of referrals I get when I ask consistently and have a process to it. Invariably there are people who will never refer but I think they are the minority if we just ask and do it genuinely.

The client assumes that there already is a capable planner in place, thus, why recommend something that already is in use?

I think its a combination of the social risk of it not working for their friends and the advisers skill in asking for referrals.

Unlike the electrician, plumber, party planner, etc, we don\’t create an immediate tangible result. Clients don\’t always know our value for years.

Because I don\’t always ask.

They are fearful or risking their own reputation on someone else. What we do is largely intangible so it is hard for them to stake their reputation on it.

They don\’t know how we can help because they don\’t have transparency other people\’s financial situations

They tend to think that their family and friends are better off than them and do not need advice.

Some clients feel their friends are not as advanced as they might be in financial matters so they keep their own cards close to their chest.

The best client referrals come where there is a deep and meaningful connection between client and adviser that is beyond money, someone who truly listens, understands and provides guidance.

Financial matters are private matters and people don\’t readily speak about what they are up to in fear of being \’behind the joneses\’ and if they do speak it is often what they have done not what help they have had.

Because there is too much at stake referring to a Planner you are not absolutely convinced about

I think its because its a long term relationship that they are recommending. Money is very personal. They don\’t like to be blamed either when the markets are volatile and their friends panic when markets go south.

they don\’t like to talk about finances

My company is new and my clients would like to see the results before referring me to their friends/family.

Privacy. A lot of folks are just private about their affairs. Money, sex, religion, you just don\’t talk about some things in polite conversation.

And clients place themselves in a vulnerable position when they refer. It\’s a risk/reward proposition: There\’s a lot of downside (their friends hold them responsible if they have a bad experience relative to what they\’re already using), with very little upside (they get a thank-you from the advisor?).

I believe that most people who will not refer, fear the friendship/relationship may be in jeopardy if the friend they refer is not happy with the service provided to them even if they were.

I\’m not sure – I have never asked them – maybe that is my problem?

Money is a subject that individuals aren\’t always comfortable discussing with friends/family/associates. So it may not be natural for them to raise the topic and suggest the referral…my impression is that clients refer when asked \”Do you have an adviser\”, or \”what do you do about ….\” this leads to a reactive referral which is less frequent than what would be achieved from a proactive referrer .

They dont want to boast about their own financial situation

I only recently discovered that one way to get clients to refer people to me is to ask them to do so – \”you\’re happy with my service, solutions and products? Do you have any friends or colleagues who would also be happy like you are with my service solutions and products?\”

I\’ve trebled my referral rate in 3 months.

In my country we do seem to have a cultural bias that makes gaining referrals harder than it should be.

They feel out of control of that relationship and money is deeply emotional for most folks.

People say I don\’t feel comfortable referring anyone. They can\’t really explain it. They have no trouble referring a restaurant or movie.

Some people may not wish to refer until they have seen results themselves..

Because they don\’t know details of their friends financial affairs so don\’t know if their FP would be suitable. It is only when there is an honest discussion about money that referrals flow.

If they don\’t refer me it\’s usually because I haven\’t made it easy for them to do so.