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If you’re using this ego-stroking language – “by referral only” – to describe how you work, yet would take on a million-dollar prospect you met in the proverbial elevator, you’re arrogant and you’re lying.
Many advisors want to describe their businesses in ways that point to exclusivity, professionalism and class. There’s nothing wrong with that. However, saying you’re a “closed shop” can shut down conversations and backfire on you.
Reality check
During a recent Q&A time after a speech I gave, one advisor matter-of-factly mentioned he worked “by referral only,” which he explained meant that he only accepted new clients who came as referrals from existing clients.
I asked him if he was flying home later that night from the conference, which he was. So, I inquired, “On the flight home, if you find yourself seated next to a mid-30s, confident, pleasant businessperson, who also happens to live in your hometown, and you ascertain that they and their spouse own a decent-sized company, have some concerns about their financial direction and clearly aren’t thrilled with their present advisor, and don’t want to work personally with their firm’s 401k provider, and you realize they could be ‘loaded,’ would you turn down any business because they don’t necessarily know someone with whom you already work?”
To which he replied, “Don’t be crazy! Absolutely I’d look to bring them on; in fact they sound ideal!”
So why is he claiming his business is “by referral only”?
Don’t misunderstand me. There’s nothing wrong with building your business by referrals from existing clients. Doing that is great and shows strong trust within your client relationships. Just realize there’s no need to describe yourself to people as “by referral only.”
Just be friendly
I’ve been in this industry for nearly 20 years, working with many firms and individual advisors, and I couldn’t think of any reason why or how an advisor would feel good about saying he or she has a referral-only policy.
Those who default to this language don’t genuinely have a desire to place others first. Yes, there are plenty of websites that all say, “Our clients come first,” or, “We treat your money like our own.” But, if people really do come first, you should at least be caring enough to listen to them for a few minutes, genuinely desiring to see how you can be of help. If you’re talking with someone at a party, surely you’d at least want to keep learning about them without killing any conversation by bragging about working “by referral only.”
Granted, the help some people require might not be the type you provide, but you can at least show people the courtesy of listening. Maybe they’re too small for you to work with or have significant debt and no savings and would be better served by seeing someone focusing more on family budgeting. But once you bring out the by-referral-only line, you cut them off and present yourself as someone who cares only about certain people, and, if they’ve just met you, it’s not them.
If a prospect isn’t a great fit for you, do you know a couple of other advisors or firms in your area you could refer them to and perhaps even provide an introduction? If we truly care for people like we say we do within our industry, this is a reasonable thing to do. Dentists and doctors often have others in the area they’re happy to refer people to if they are not accepting new patients themselves. Surely we can treat people as professionally in our niche.
Say this instead
Instead of using the by-referral-only line to describe your business, consider saying:
Typically new clients come to us from referrals from existing clients. We have a lot of fun familial and friendship connections among many of our clients.
While we’re pretty particular about who we work with, we’re always happy to talk with people to see how we can help. We love to hear people’s stories to be able to determine if working together could be a good fit for both of us.
You’ll come across friendly, professional and successful when you use language like this. Most important, you’ll be both helpful and humble.
If you really are by referral only
If you are truly by referral only, you can say:
Presently we’re working with all the clients we can best service for right now. Tell me a little about your situation, concerns and challenges, and maybe we can suggest an idea or two or at least connect you with someone else who can help further.
Even if you don’t want this prospect as a client, you’ll still come across as helpful. In the course of your conversation, you may learn they actually do know a client or two within your firm. Then, you can decide how to proceed next.
Great way to network
Prior to directing people to another advisor, you’ll want to get to know the advisor. This is a great opportunity to connect with professional peers, learn about their focus and approach, and meet colleagues you may possibly want to collaborate with in the future. There’s no telling where such connections may lead.
Professional speakers do this often. If I receive a request to speak, and I’m booked elsewhere on that date, I have a few other speakers I’ll refer the client to. It’s helpful, professional and keeps me humble. Those speakers, in turn, will often refer business back to me later on.
What if you want to work with someone after all?
If a prospect seems like they might be a fantastic client and there’s any possibility that you might like to learn more about them and possibly squeeze them into your business, you can leave that door open, without insinuating you would not have the capacity to service them well.
Our firm is pretty full with the clients we’re already working with, but tell me a little about your situation, concerns and challenges and the type of person you’d like to work with. Let’s just talk about what you’re looking for and see how I can best help.
Once you know more, you can decide if and how you might stretch to accommodate them.
We used language like this as our firm grew. When we had recently hired a new advisor, but she had not yet begun working with us, we let people know that we’d get back to them once our newest colleague had joined the firm. (Note: We referred to her as a new colleague, not as a new or beginning financial advisor.)
We would suggest a couple of firms they could try if they simply couldn’t wait, but, if they would be a suitable client, we also encouraged them to reconnect with us again in six weeks if they didn’t find someone else they were comfortable with by then.
Remember
Some advisors need to stop puffing out their chests and drop the arrogant attitude. Yes, we all want people to think the highest of us and project that business is going great. However, you can achieve that most effectively by showing people your consideration and resourcefulness. Be careful how you view yourself in your own eyes.
Instead of mentioning the by-referral-only line:
- Listen first to what people need;
- Look for how to provide hope and help; and
- If you can’t provide that, guide people to some advisors whom you know and trust who do have capacity to help.
Paul Kingsman is a sought-after expert on being focused, distraction-proof and helping financial advisors succeed sooner. Through his speaking, writing and coaching, he teaches financial services professionals how to maintain focus and take practical daily steps to successfully grow their businesses and achieve outstanding long-term results. To find out more about Paul and how he can equip you or your team to achieve your own outstanding results, visit PaulKingsman.com.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
