How Can I Get Clients to Refer Up Instead of Down?

L.H., an independent in Montana, emailed last week and asked:

"I get many referrals to lower quality prospects. How can I get 'referred up' rather than'referred down?'"

It's a great question. There are two pieces to the answer.

The best way to get referred to the type of clients you want is to take control of the process: by asking directly for introductions to specific people your clients know, rather than waiting for them to suggest names.  Automatic Referrals teaches a process called "network mapping" that helps you match the types of prospects you want with the people your clients know, and then ask for introductions to those people. 

This is the referral method that the most successful advisors use.  It gives you much more control over your referral flow, and also makes it much easier to make contact with and make a good impression on referred prospects.

However, the reality is that sometimes clients will provide unsolicited referrals, and you want those prospects to be qualified.  The best way to deal with this is to make sure that you are properly educating your clients about your business and the types of clients with whom you work. Don’t assume that clients know your areas of specialty, specialized services you may offer, account minimums, etc.  You can educate them in casual conversations, in marketing materials, in your newsletter, or by discussing it with some standard language during client reviews.   And, to the greatest extent possible, it's good to train clients to check in with you before making a referral.

Here’s one example of how you might phrase this, either in a meeting or in language you include in a client letter or newsletter:

"A number of my valued clients have been kind enough to ask if I am accepting new clients.  I am always grateful for your trust in recommending me to friends and family members.  At present, I am able to take on new clients in two specific areas: business owners who are seeking the opportunity to sell or transfer their business, and corporate executives who are within five years of retiring.  If you have someone in mind who may be looking for this type of financial advice, please call the office. If I am not the most appropriate choice to provide the help they need, I will always try to recommend another advisor who would be suitable."

On a related note, if you are going to turn away underqualified referrals (which is entirely appropriate and necessary from time to time), make it a point to identify one or more other advisors to whom you will feel comfortable referring those referrals—advisors who will appreciate their business, and provide them with quality service.