It is widely agreed that referrals are the most effective method of organically growing a financial advisory business. Referrals are generally more cost-effective than new clients gained through conventional marketing. And a client who refers a friend, relative or colleague is providing an implicit endorsement of your services and your trustworthiness.
Existing clients are not the only potential sources of referrals. These contacts can also direct potential clients who suit your ideal client profile in your direction:
> Prospects who did not become clients
A potential client who has turned out to be unsuitable for your practice might know someone who could benefit from your services. For example: an advisor who specializes in retired dentists has a prospecting meeting with a young airline pilot who turns out to be unsuitable as a client. The advisor refers the pilot to an advisor who specializes in airline pilots. The pilot, in turn, could refer a dentist friend to the first advisor.
> The unhappy clients of other advisors
Keep your eyes and ears open for word of clients who are not satisfied with the service they are receiving from their current financial advisors. Even if those prospects don’t suit your client profile, they might know someone who needs the services of a good financial advisor — and are not likely to recommend their current advisor.
> Your competition
One of the benefits of networking with other advisors is the opportunity to set up reciprocal referral arrangements. Establish relationships with a few advisors who have clearly defined ideal-client profiles. Refer potential clients to them that you believe suit their ideal client criteria. Those advisors will likely return the favour should the opportunity arise.
IE