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Top 5 Strategies For Generating Client Referrals

George Macallister
Mar 1, 2017

It's often been said that word of mouth advertising is both priceless and impossible to buy. That's certainly true in the world of financial planning and wealth management. If you want to grow your assets under management and build your existing business, you have a number of choices. You could beat the bushes and spend a fortune on advertising and lead generation, or you could harness your most powerful resource - your existing client base. Which strategy do you think will be most effective?

Whether your firm has been in business for a year or decades, your clients are your most valuable financial resource. Your firm's AUM represents the bulk of your income, and increasing AUM grows your earnings. That means getting your current clients to invest more or getting them to refer their friends and family members to your firm.

There is no rule preventing you from doing both - growing your AUM per client by providing top-notch service and results, while attracting new AUM via client referrals. In fact, that combination approach is generally the best way to keep your earnings growing and build your brand over time.

If you want to increase client referrals to grow your AUM, you need an approach that gets results. Here are five top strategies for attracting client referrals and building the long-term value of your financial planning or wealth management firm.

1. Provide Great Results

The best strategy for attracting client referrals is also the most important. By providing great service and consistent results, you will naturally attract new referrals from your existing clients.

No matter how extensive your outreach or numerous your strategies, you will not get many client referrals if your investment results are subpar. If on the other hand, you provide excellent results at a reasonable cost, you should expect a steady stream of client referrals and a steady increase in your AUM. Everyone loves to share their success, and your happiest clients will be thrilled to talk about their results. That's good news for you and your firm.

2. Offer a Free Consultation

Your current clients are invested in the financial success of their children and grandchildren. Based on their experience, when the time comes to choose a financial professional for their kids and grandkids, your clients should think of you first.

At the same time, your clients may be reluctant to recommend you. They may worry that you wouldn't be interested in serving the young people in their lives, especially if their total assets are still somewhat low. You can dispel their concerns by offering them a free consultations for family members. The next generations will get solid investment advice they can use to get started, your clients will feel good, and you'll have solid leads to grow your AUM - all in all a win-win-win situation.

3. Give Your Best Clients a Gift Certificate

Recognizing your best clients for their loyalty and dedication is important, and there is no better time to do that than at the holidays. As the holiday season approaches, you look for unique gifts that are both interesting and practical, and that will be well-received and readily used.

If you are looking for a great way to build client referrals while thanking your most loyal clients, consider sending them an invitation to refer a family member (or friend or colleague) to you in exchange for a personal reward. The reward, for example, could be an in-depth investment consultation on market trends keyed to the client’s portfolio over lunch or dinner or a round of golf. Or the client could, in turn, elect to give the certificate or card to a family member, friend or colleague. Be creative in leveraging the value of your firm and time into generating new leads.

Investors generally know that they will benefit from professional advice, but some still hesitate to seek guidance. They may worry that the costs will be too high, or that their total assets will not qualify them for the best service. By giving them gift certificates or cards, you can overcome those obstacles, attract new clients for your firm and boost your AUM.

#4. Nurture Your Client Relationships

Nurturing the relationships with your client base is absolutely essential, both for the current health of your firm and for its future growth prospects. If you expect your current clients to provide you with a steady stream of quality referrals, you need to treat those clients right.

There are lots of things you can do to nurture your client relationships and reward the loyalty of your best investment partners, from providing complimentary consultation services and tax planning advice to offering discounts on other selected services. By nurturing your client relationships, you can enhance brand loyalty, build your business, and increase your referrals and AUM.

#5. Make Your Firm the Best

If you want to ensure a steady stream of new clients and build your AUM over time, you can start by making your financial planning or wealth management firm the best it can be. Good news travels fast. Making your firm the best around should be a high priority, but optimizing your performance is not as easy as it sounds.

The owner and key personnel of the firm should be constantly vigilant about how the firm is perceived. That's why its important to also have the perspective of an objective outsider, someone who can provide impartial advice and guidance. Services like Truelytics specialize in helping the owners of financial planning and wealth management practices optimize their firms.

The increases in efficiency and cost-effective performance can be quite profound, helping practice owners enhance their operations, lower their costs, and make the most of their current client relationships. By making the practice more efficient, owners can generate more referrals, grow AUM and build profits.

As the practice owner, your richest source of referrals lies with your existing client base, and implementing the five strategies above can richly enhance your business.


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