There are many deeply held misconceptions surrounding the reasons why clients do or do not provide referrals, according to Julie Littlechild, founder of Advisor Impact Inc. in Toronto.

Research from Advisor Impact’s 2013 Economics of Loyalty report, along with ongoing discussions with clients, suggests advisors have five mistaken beliefs regarding this issue. Understanding where the inaccuracies lie can help you find opportunities to encourage referrals.

Here are the five myths regarding referrals:

1. Clients who are comfortable providing a referral will actually do so
Advisor Impact’s research indicates that between 80% and 90% of clients are comfortable providing referrals.

But when asked if they actually have provided a referral, Littlechild says, only about 25% said yes.

So, even if the majority of your clients are happy enough with your service to recommend you to a friend or family member, they are probably not seeing the opportunity to do so.

2. Clients refer because they want to help you grow your practice
While happy clients won’t mind helping you boost your business, their main reason for referring their advisor is that they want to help friends.

When friends get together, Littlechild says, they don’t talk about how happy or disappointed they are with their financial advisors. Instead, they discuss their problems and life events, such as divorce or financing their children’s education.

Advisors would need to communicate their specialty in an effective way to their clients. Clients, in turn, should readily connect the dots when a friend mentions a financial concern the advisor can help with.

One way to keep your clients aware of your expertise throughout the year is by publishing articles in a blog or newsletter that directly relate to your target market.

3. Asking for referrals triggers referrals
There is a lot of debate among advisors and practice-management experts regarding the usefulness of asking for referrals.

Asking for a referral doesn’t hurt and often clients will consent, according to Littlechild. However, her firm’s the research reveals, those requests are not closely correlated with action. In other words, it is usually something other than the request that triggers the referral.

4. Clients don’t provide referrals because they’re uncomfortable discussing finances
While many advisors believe people just don’t like talking about money, only about 5% of clients say financial conversations make them uncomfortable, according to Advisor Impact’s research.

For the right reason — such as helping a friend in need — clients will gladly refer their advisor if they believe the advisor can help.

5. Clients refer because they are satisfied with the service provided
The research indicates that approximately 80% of clients are strongly satisfied with their advisor. But only a quarter of those satisfied clients actually follow through with a referral.

Advisors who expect clients to refer them must develop a relationship that produces a feeling that is stronger than “satisfied.”

“We’re laying the ground for referrals more when clients are deeply engaged,” Littlechild says.

In order to engage your clients, you must provide service that goes beyond an annual meeting, a few phone calls and a newsletter. You have to provide comprehensive financial planning that educates your clients and involves their family in the process.