July 21, 2016

How to Build a Strong Network of Referral Partners – by Vivek Shah

Vivek Shah
Founder & CEO, Finrise Financial Planners

How to build a Strong Network of Referral Partners?

Referral Partners plays the most important role in the growth of advisory practice for Financial Advisors. But unlike USA and other western countries, majority of Indian IFAs don’t have scientific and systematic methods/processes to generate referrals to grow their practice. A financial advisor from Mumbai told me recently, “I’ve found that the referrals I get from my referral partners are definitely the easiest ones. When you sit down with them, they’re almost always sold already.”While great referrals are the best way to gain new clients, not all FAs are lucky enough to get lots of them. So, how do you get to that point? My endeavor in this article would be to give you process of building a referral partners. So Lets begin with the process of building a strong Referral Partners to grow your advisory practice.

In order to start a great referral network, you’ll need to be familiar with these three phases:

Phase I: Meet approximately four to six people who fit your networking criteria.

Phase II: Get together regularly and consistently add value to the relationship—give first!

Phase III: Train your partners—and get training—on how to provide each other’s ideal referrals.

Phase I: Find referral partners

Look for four to six referral partners in regular contact with people who would make good clients for you. You should look for referral partners who can provide you your target client base. Ask yourself these nine questions to determine who will make a good referral partner:
  1. Does this person know others who would make great clients for me? Does he get out and network much?
  2. Is this person competent in understanding and serving my client base and/or target market? Is he in a good position to talk about what I do for a living?
  3. Is this person as hungry as I am?
  4. Does this person ever refer others? Does he talk to his clients and people he knows about other needs they may have aside from his own core product and service?
  5. How much do I like this person and does he really like me?
  6. Would I recommend this person to my clients?
  7. What will it take for me to become the go-to financial advisor that this person recommends?
  8. Is this person truly committed to connecting with his clients and showing a genuine Interest in their lives and hobbies or is he mostly “business as usual”?
  9. Possible red flag: Is this person too easy to get a hold of?

In building referral partners for your practice, an advisor should remember most important point which he generally neglects in curiosity of getting more business when it comes to choosing referral partners, it is quality, not quantity that you’re after. For example, An advisor from Ahmedabad and his referral partner share a financial planning practice in same office. Last year they worked hard to build great relationships with a leading Manufacturing company, two Chartered Accountants, and two lawyers, people who are arguably in these professions who understand the benefits of cross-referring. They have received 65% of their business from the Manufacturing Company and another 25% from the other four referral partners.

An advisor from Mumbai, who used to specialize in providing services especially for seniors, built referral partnerships with a real estate agent who worked primarily with seniors and a lawyer working majorly with seniors. The trio met at a local senior consortium event in Mumbai, which attracted all sorts of specialists who serve adults over the age of 55. They then added a fourth woman who runs a company that focuses on serving seniors. This group continues to network very closely with each other and meet regularly and they have formed a group called Positive Transitions to help seniors plan for the next step in life. Looks Interesting…

Phase II: Establish regular contact and consistently add value

In order to make these relationships work, you need to meet regularly, consistently provide value to each other, and become an information broker for your referral partners. Here are the details on these three strategies.

Sustain regular contact
This is just a common sense—if you don’t see or meet regularly your partners, you can’t build the relationship. You have to keep in regular contact. Don’t let the connection wane. That doesn’t mean you talk every day, but it does mean you maintain an ongoing presence in each other’s business lives. How often is enough? That’s up to you. For instance, I used to communicate about twice each month by e-mail and meet for lunch or coffee every alternate month to discuss what’s new and ways they can continue to help each other.

Consistently add value to each other
Think “revenue enhancement.” For my practice, referrals come because my referral partners share positive stories of how I have been   helping their clients. This has built trust among referral partners, who feel confident that their referrals will be effectively handled. Moreover, these stories pop into everyone’s memories when they encounter similar situations or needs in their own clients in future.

An advisor from Ahmedabad, employee benefits specialist for corporates has helped his property referral partner by sending him referrals, and he has even helped him make more money in other areas by giving him some sales ideas to increase his life insurance production and individual health insurance sales. They also have done some joint work with long-term-care insurance.

Be a Knowledge Giver
I have a practice to send my referral partners books, e-zines, and magazine articles on topics that interest them and may help them improve in their business. (I have subscribed to Magzter app where I can view, share. download and read more than 1000 magazines from more than 20 categories). Whenever I meet my referral partners for lunch or coffee, I keep them up to date on changes in their respective field. We also bring a business-building idea worth sharing. And some of it is relationship building. I also e-mail them regularly and stops in at their offices to share other ideas. I refer them business, and that helps get more referrals from them too.

Phase III: Give and get referrals

Once you are meeting regularly and have built a certain degree of trust with your referral partners, The key strategies you can use to maximize the number of referrals you give and receive from your referral partners is to train your referral partners.

First and most important is referral training. You have to teach your referral partners how to find business for you. Advisors make the mistake of thinking that what they do is obvious and easy to talk about. But people think about themselves 95% of the time; other professionals need you to make what you offer simple and clear, so they can easily open the door for you to their contact sphere. But remember to be reciprocal—learn how to help your referral partners, too. Be sure you can make a clear and effective presentation of what they do.

Secondly, Coach your referral partner on what to listen for in conversation with his clients or other contacts that might indicate that someone would make a good prospect for you. Learn who his ideal client is, and teach him who your ideal client is. Then teach him to look for conversational clues that indicate a person could be a good fit for you as a client.

Coach your referral partner on your areas of expertise so that if they come up in conversation, he can casually say, “Oh you should talk to my friend Vivek Shah about that. He could really help you in this matter. Should I give him a call?”

In the end, by following through on these three phases, you’ll be on your way to getting the easiest referrals which I would say are: Recommendations from other business professionals whose credibility sells their clients on you.

I hope this will get positive change in your advisory practice.

Authored by,

Vivek Shah

Founder & Chief Executive Officer
Finrise Financial Planners

One response to “How to Build a Strong Network of Referral Partners – by Vivek Shah”

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