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How to generate referrals

Having a sound client acquisition strategy in place is a key element in successful financial planning businesses. As you consider your strategic priorities for 2021, Faith Liversedge shares practical tips on how you can improve your approach to generating client referrals.

If we didn’t already know how important generating referrals were to adviser businesses, the screenshot below makes it clear: Referrals are where it’s at for most advisers and yet despite their importance, many people struggle to develop a strategic approach to generating them.

This might not matter to those advisers who are happy with their businesses ticking along. Referrals that happen naturally – almost accidentally – are of course great for business. But they’re not a great way to build a business. In increasingly uncertain times, having a structure in place for referral generation brings great peace of mind.

A strategic approach

If you want to do that, a more strategic approach is needed. But where do you start?

We need to shift our thinking

The reason many advisers shy away from formalising an approach to referrals is that asking for them feels awkward and salesy.

We’re British after all, and we don’t want to blow our own trumpets. Understandably, asking for referrals might seem pushy, and unless it falls naturally into conversation, might feel as if it’s coming across as desperate.

Perhaps it could also be down to a lack of confidence about what you do? So, firstly, let me remind you that you’re doing great things.

Selling is only sleazy or pushy if you want to make money at the expense of anything else, particularly a person’s wellbeing. But financial advice and planning has peoples’ wellbeing at its heart, and there’s plenty of evidence to prove it.

Research by Royal London for example, recently found that financial advice helps to increase the emotional wellbeing of customers by making them feel more confident and financially resilient when compared to those who have not received advice.

It says that advised customers who have an ongoing relationship with their adviser are almost twice as likely to feel in control of their finances than those who don’t.

(Another study of theirs also found that on average, working with a financial adviser will make you better off than if you take care of things yourself – to the tune of £47,000.)

So you know what you do is great and you know that more people need it. If you don’t actively spread the word then these people will miss out and fail to benefit. If you think of it that way, then it removes the personal aspect from it – you’re now fighting a cause.

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