Forget about asking for referrals. That's the advice of former financial advisor Stephen Wershing, CFP, author of the forthcoming Stop! Asking for Referrals ... and get more than you ever have and founder of the Client Driven Practice, which counsels financial advisors. Here, he tells contributor Michelle Lodge how advisors can reorder their thinking.

1. Why is asking for referrals a turnoff for clients?
It makes clients uncomfortable. And it makes financial advisors uncomfortable, too. They are afraid to ask for referrals, even though they are told by their bosses and in every article they read to ask, ask, ask. Being afraid is good, because it's a protective mechanism, like not wanting to touch a hot stove. One source for understanding the psychology behind referrals is a study, called "Anatomy of a Referral," conducted by Advisor Impact, which helps FAs and CPAs grow their business.

2. But aren't referrals good for business?
We make referrals all the time. When someone asks us for a restaurant recommendation or referrals of a doctor, movie or lawn service, we are quick to offer it. We do it because it's social currency; it makes us look better in their eyes. In this business, we are ignorant of that fact. Instead of helping clients realize the benefit of using our services, we ask them to jump over the process. FAs have to think about what's in it for the clients, not what's in it for them. Having successful referral marketing is more like being a farmer than a hunter. As a farmer, you spread the seed, but you don't worry about whether each individual seed grows. The farmer knows that if he or she does the right thing, there will be a healthy crop. In the case of FAs, you won't know the genesis of each piece of new business. But the important thing is that your phone is ringing.


3. How does the advisor get referrals without asking for them?
Have the "new referral conversation" with the client that will prepare him or her for the opportunity to refer. That means engaging the client in an exploration of the solution or experience you represent and recruiting them to help you explain it and who—the best prospective clients—to tell it to. Rather than asking for referrals, it's asking for advice. You can also ask your client for an introduction to a specific person. One of my favorite ways to do this comes from Sam Richter, motivational speaker and sales coach, who uses With this social media outlet, you can see your clients' connections and get a sense of what individual connections may need from an FA. Another big way is to draw advice from your client advisory board, a group of your best clients that you have put together for feedback about what they want, need and expect from you. Almost universally, they become your best referral sources.

4. How does target or niche marketing work?
Advisors tend to do it really superficially and than forget about it. When you meet a prospective client, you tailor your pitch to say: 'I could do one, two and three for you,' which relates to [his or her] circumstances.

5. How do typical FA strengths get in the way of marketing?
Good FAs pay close attention and they are diligent. To use a poker analogy; good service and taking care of the client are table stakes, that's the ante. To pitch new business, FAs may tell prospective clients that they have a lot of experience, maintain good customer service and have integrity. But those things don't tell them why they should hire you instead of another FA. You have to figure out what particular solutions you represent to particular clients. When you distinguish yourself that way, it leads to new business.

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