The Evolution of Referability

When I embarked on my journey as a financial consultant back in 2011, my seniors taught me that “referrals are the bloodline of our business”. I am glad I kept this close in my heart even till today.

While there are many ways of reaching out to people, such as through roadshows, cold calls, or even digital marketing, I found referrals or personal introductions to be the more effective and sustainable way to meet with prospective clients. This is especially true today, where data privacy is highly valued across all mediums, and roadshows come with tighter restrictions.

However, building this business purely through referrals is not a walk in the park either.

In my initial years, I would passionately ask for referrals in all my appointments. I took pride in my ability to persistently persuade my clients to tell their friends about my services. While some of my peers only managed to receive 5 to 10 referrals in each appointment, my clients would often message 20 to 30 people in their network on the spot, to share with them about my services. That was how I attained my first Million Dollar Round Table (MDRT) in 2012, and every year after, up till 2016.

That year, the unthinkable started to happen – I began to face more resistance from my clients and prospects when I asked for referrals. Moreover, DNC regulations were in place, which made contacting new prospects trickier. I was getting fewer referrals from each facetime, and as a result, I had fewer appointments too.

What was going on?

The dip in activities opened my eyes to the big shift in clients’ mentality towards data privacy and inevitably, towards giving referrals. I also realised that all along, I’ve only been relying on one way of generating referrals, which is through active asking when we meet face-to-face. If I don’t meet my clients, I don’t get referred.

What I needed was a more consistent and sustainable source of referrals - and that is to generate them passively. At that point, I knew I had to change the way I work with clients and the way I get referred.

Just like that, by shifting my mindset and taking some simple steps, I managed to achieve my first Court of Table (COT) in 2017. To date, I have acquired more than 700 clients through referrals, receiving more passive referrals and attracting clients I enjoy working with. Best of all, this shift has greatly improved my clients’ experience, and I establish better relationships with them as well.

I often hear consultants share their fears towards asking for referrals or the difficulties they face when they try to build it into their practice. Here are 4 important questions that I asked myself when I was developing my referrals business model, and I hope they can be useful for you.

1. Who do I want to work with?

I realised only recently that this is one of the most important questions to ask if you are serious about building a financial advisory business. I wished I had asked myself this question much earlier in my career. Although it’s common that consultants want to work with high net-worth clients, you need to be honest with yourself and consider if they are the most ideal market for you. Moreover, net-worth should only be one of the criteria in your Client Selection Checklist. Yes, you read it right, a Client Selection Checklist. While clients are in the position to choose their consultants, I believe we need to choose our clients too. Most financial plans are implemented with the long term in mind, which means that a commitment to walk this journey with our clients is part of the deal when the plan is purchased. That is why a mutual fit must first be established and clear expectations be communicated both ways, in order for the long-term relationship to begin.

In my own Client Selection Checklist, there are 3 factors that I consider - Affinity, Advocacy and Assets. Affinity refers to the connection and alignment of values between my prospective clients and me; Advocacy refers to how open and willing they are to introduce their network to me; Assets refers to their financial capacity.

After I identified who my preferred clients are, not only was I more effective, I also found renewed joy and purpose in my work. For example, a profile I specifically choose to work with is medical doctors, because I find that our values are often aligned. I have deep respect for doctors because of the important role they play in taking care of human lives. For many good doctors, the commitment they hold to continuously upgrade themselves to serve their patients better is admirable. I communicate this clearly and often to all my clients, so that they know who they should refer to me, and even who not to! Having this level of clarity has allowed me to receive more introductions to doctor clients than ever.

2. How am I different?

I used to tell my clients that my role is to help people plan for their retirement, create a comprehensive insurance portfolio and that I am a reliable consultant. Over time, I found that these descriptions are beyond cliché.

Of course, a basic expectation of consultants is that they must always act with integrity and be highly competent to conduct the advisory process. However, in the crowded space of financial advisory today, this is not enough to stand out.

Hence, I chose to differentiate myself by value-adding to my clients in areas of importance in their lives. I seek to help my clients achieve harmony in their F.O.R.M. – Family, Occupation, Recreation & Money.

Many referrals who became my clients subsequently, were introduced to me not for financial planning, but rather for career advancements in their respective industries. Some are keen to attend our personal development webinars where they learn to deploy their Gallup CliftonStrengths to excel in their respective careers; others want to learn how to deploy career strategies to find their desired jobs as soon as possible.

Over time, I became the go-to person in my clients’ circles when they or their friends face challenges in their career, which sets me apart from other consultants.

3. Am I hunting or am I farming?

I used to think that establishing a strong foundation of trust is the most important key for clients to refer, and if they don’t, it is because they don’t trust me enough. Over the years, I realised that even with trust, some clients will still turn down my request to be introduced to their network.

I began to see that there is something else at play here. The question is not whether clients trust me, but whether clients feel SAFE enough to connect me with their network. Clients often refrain from opening this door, because our poor reputation as an industry precedes us, unfortunately. Many financial consultants today still take a Hunter mentality and approach, where their focus is to make an immediate sale. Hence my clients often have a hard time convincing their friends that this will not be the case with me.

To help clients feel safe enough to refer their friends to me, I’ve learnt to take on a Farmer mentality and approach – to focus on nurturing the relationship, providing ‘nutrients’ by adding value in ways that are relevant and impactful to clients, and to do it consistently. To make sure I can follow through in my service commitment, I leveraged on a Client Engagement System to make sure that my clients will continue to receive useful information and valuable insights, in areas that matter to them.

Imagine if the only time your clients hear from you is when you want to sell them another financial product. That will not be a very pleasant client experience. So, what can you do? For example, if you choose to work with clients who have children, you can provide relevant support for them, like partnering with parenting coaches or children’s enrichment centres. You will then naturally come to your clients’ minds when they receive support in these areas. This way, not only will clients be attracted to you and stay with you, they will also actively refer you to their network.

4. While I am supporting my clients, am I also receiving support?

Mastering the mindset and skillsets to increase your referability takes energy and focus. I personally find it hard to imagine myself working hard to build a referrals system, only to be met with discouraging views from managers, or conflicts with colleagues who hold a different business approach or focus.

I believe we are the average of the 5 people we hang out with.

If you are serious about building a referrals system and a long term financial advisory practice but are not getting the right support from your organization or leaders, consider seeking mentorship or advice from those who have walked the path so that you do not limit your own growth. Form your own mastermind groups to exchange ideas, discuss strategies and gather feedback, and make sure that you have buddies who will keep you accountable to your goal. This journey can be more fun, with tough times made more bearable, when we have like-minded people working through it together.

Personally, I know that I would not have acquired my skills and success today without the help and support from my teammates who care for me and keep me on track to my goals. They are also the ones who dare to point out my blind spots so that I do better for my clients. For that, I am grateful to be in an environment that continuously supports my learning and development.

I think getting referrals is both a Science and an Art, and I am glad that with the right strategies and a lot of hard work, I was able to make it work for me. As the industry evolves with the changing landscape, this skillset is only going to become more important. I hope competent, honest and hardworking consultants do not get left behind.

If you are looking for ways to improve yourself, enhance your referability and build a more sustainable financial advisory business, I hope my questions and sharing above will set you thinking and help you to do just that.

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Ling Chun Wei is an authorized Financial Consultant representing finexis advisory Pte Ltd.

This article contains only his personal views and opinions and is for informational purposes only. The information provided is of a general nature only and does not take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and should not be relied upon as financial advice. You should seek advice from your financial consultant before making any financial decisions.