High Net Worth Clients Simply Don’t Refer

High net worth clients simply don’t refer. Or so we hear. Most financial advisors believe that some clients are bad at referring. We’ve heard advisors say the main reason for this is that high net worth people don’t like talking about money. Plenty of advisors believe that and hang their hat on that excuse as to why they don’t get more referrals.

We have always believed that high net worth clients don’t refer for multiple reasons.

  1. The financial advisor asks for referrals when the client is not ready for the request. For example, asking for referrals during a client review meeting is awkward. It can easily put a bad taste in a client’s mouth or tarnish the relationship. A review meeting is intended to be about the client, not the advisor.
  2. Often, the advisor asks the client for referrals when the relationship is too new. This typically will not result in referrals but rather a feeling of pressure and desperation.
  3. The advisor never really asks the client for referrals. Surprisingly, a very high percentage of our financial advisor clients come to us seeking help specifically on how to ask for referrals. With a little digging, it becomes obvious that fear of rejection, low confidence or lack of comfortable, authentic language stop them in their tracks.
  4. Clients don’t refer because it’s perceived as too risky. The client doesn’t want something to go wrong and risk their relationship with their friend and/or with you.

But reality isn’t quite what we expect.

In our newest book, A Woman’s Way – Empowering Female Financial Advisors to Authentically Lead and Flourish in a Man’s World, we gave a spotlight to some new research on the topic. The good news is we now have some statistics to support our belief. Julie Littlechild, owner of Absolute Engagement, has completed a study on why clients don’t refer. Her results might surprise you. The reality is that only 19% of clients don’t refer because they don’t like to talk about money. That leaves 81% of clients who are willing to talk about money!

On her blog posted April 4, 2018, Littlechild said, “According to our latest research with high net worth investors, 64 percent of clients who didn’t refer in the last year said it was because they simply hadn’t met anyone they thought needed a financial advisor. A further 18 percent said it was because they didn’t know who to refer.” So, the main reason clients don’t typically refer is that they don’t recognize an opportunity for their advisor and even if they do, they’re not quite sure how to talk about their advisor.

Based on this information, the biggest challenge in getting more referrals from high net worth clients is how do you teach your clients to recognize an opportunity and how to talk about you. If you need help capturing referrals from that 81%, CONTACT US to get in touch for a free consultation.

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