Referrals for Financial Advisors Aren’t Dead Yet, But They Need to Evolve. Here’s How.

Recently, a good friend of mine asked me if I’d heard of the Robinhood app. If you’re not familiar with Robinhood, it’s a smartphone app that allows you to trade with no commission fees. It’s simple and easy to use.

He then texted me a referral code from Robinhood. Tapping the link sent me to a dedicated web page where I could receive a free share of one of the most popular stocks traded on Robinhood. And even better, if I sign up, he gets a free stock too. The offer is enticing on its own and even employs a little bit of peer pressure, because who doesn’t want to do their friend a solid?

That little exchange got me thinking about how Robinhood is doing a much better job of encouraging referrals among its users than most financial advisors.

While there’s still many advisors who rely on a word-of-mouth to acquire new clients, the industry as a whole seems to answer the question “Can advisors rely on referrals to grow?” with a resounding “No.”

In an article on his Nerd’s Eye View blog, Michael Kitces notes that data “shows that referrals are no longer the primary driving force for growth.” The InvestmentNews study he cites showed that in 2016, average advisory firm AUM grew by about 3% between professional and client referrals, which was less than half of the growth created by business development strategies.

While the numbers might look dire, I don’t believe we’re seeing the end of referrals from clients or professional partners. Instead, I see an opportunity for advisors to combine the traditional idea of referrals with new digital business development strategies.

Financial advisors can still grow through referrals, but you have to modernize the approach.

In today’s article I’m going to look at one super simple way advisors can bring the referral process online and make it easier for everyone.

Making Referrals Part of Your Website

Hoping your clients give someone your phone number is a strategy from the 90s.

Wanting them to direct friends to the homepage of your website is something from the 00s.

A modern digital content strategy revolves around targeted micro-campaigns (custom messages for detailed audiences is one reason why Trump won the election) and specific web pages called landing pages. A landing page doesn’t try to give someone all the information they could possibly want about your firm. Instead, it is focused on a singular topic and it wants to ask for a singular action.

If you want to make referrals easy for your clients to talk about and for their friends to explore, create a single dedicated landing page on your website for them to visit.

On that page, offer the visitor something interesting and valuable to their situation, like a white paper or relevant market commentary, and ask them for their email. If you’re bold, you might even integrate a calendar scheduling service and ask them to set up a time to talk with you. Otherwise, that ask can come in a follow-up after they’ve taken the action to download the resource you’re offering.

This landing page approach does two things:

• It simplifies the conversation for your client. They know where to tell people to go to get in touch with you because you have a special page just for that purpose. There’s no confusion on if they should give out an email, website, or phone number.
• It makes it easier for a referral to reach out, especially if the referral is a next-gen investor. Younger investors want communication to be digital and effortless. If they can pick their own time to talk with you instead of having to email or call, that’s a win.

Above all, your clients want to receive great service. If they feel comfortable with what you do for them, the likelihood of them referring others to you increases. And they also don’t want you asking them for referrals constantly. Letting them know you have a web page available for them to point friends and family to is a quick and easy conversation.

Getting Started with Landing Pages

Even if you don’t have any experience with web design or coding, it’s simple to get started with adding landing pages to your website. There are a number of services available that let you create a landing page that’s custom to your firm, looks like your site, and can be built using drag and drop functionality.

Basically what I’m saying is: If you can drag an app from one screen to another on your iPhone, you have the skills necessary to build your own landing page.

Here’s a few of the most popular options to get you started:

• LeadPages
• InstaPage
• Use Mailchimp for email marketing? They offer a simple landing page builder.
• If Hubspot is your CRM, landing pages are an integrated solution.

Make Referrals Great Again

The only reason referrals can’t be an important piece of your advisory firm’s growth plan is if you continue to treat them like it’s the 1980s, where everyone has to be invited to a seminar or a dinner to meet with you.

The modern investor has changed. They want immediate accessibility and a message unique to their situation. The best approach is with a dedicated web page for referral traffic.

If you want to talk about ways your firm can create more opportunity with digital business development strategies, check out my consulting page for how I work with firms like yours.

(Featured Photo by Gary Bendig on Unsplash)