It’s no secret that clients turn to financial advisors for more than just advice: they’re looking for someone who’ll be an extension of their life—a part of their family. Most people only make the decision to hire a trusted financial advisor just once in their lifetimes. So, where do clients go looking for their once-in-a-lifetime advisor?
Marketers and business coaches may tell you that top advisors are raking in new clients with radio shows, podcasts, or Facebook ads. But the reality is that even with all the technology in the world today, people are still choosing an advisor the same way they always have: by asking for a referral. Yes, a good old-fashioned referral still reigns supreme.
When we were sleuthing out statistics for this topic, we noticed there’s not a lot of data out there on the subject. It took us a minute to realize that we actually have access to the data we were looking for!
Each year, we run client surveys for our advisors to help them understand what their clients care about the most. One of the questions on our survey is “Why did you decide to work with our firm?” We know the answer to this question is critical to hone their specialty.
A quick sample of the latest surveys told us everything we needed to know—and one thing surprised us: when we organized the responses into broad groups, every single answer actually fit into one of just six categories.
According to our data, here are the six ways people choose an advisor:
About half of respondents said they chose to work with their advisor because they had been referred to them, typically by a friend or family member.
About 20% of people chose their advisor because they had actually met them at an event or personally, for example, through church, friends, or a cycling group.
About 10% of clients chose their advisor after working with them through their employer-sponsored 401(k) plan.
Tax Client Conversion
About 10% of clients used their advisor after they began working with the firm to prepare their taxes. For advisors who offer tax services, this model is a great way to bring on new assets.
Seminar or Event
About 10% of new clients came on board after hearing the advisor speak at a seminar, including one event on college planning and another on alternative investments.
Only one new client was the result of an Internet search, which supports the idea that people do not type “financial advisor” into Google and hand over their life savings.
How to Get More Referrals
Here at Indigo, we’re suckers for good marketing tips and the #1 question we hear from our financial advisors is “How can we get more referrals?” So we’ll share it here: the BEST way to increase referrals is to become referable.
And how do you do that—it’s by embracing a specialty. Seriously, the riches are in the niches. Embracing a specialty is KEY to standing out online. But it’s more than just that—it helps attract more clients to you and melts away that “salesy” vibe that makes clients run for the hills (and cover their wallets).
Need help figuring out how to increase referrals without seeming desperate, sleazy, or needy? Good, because that’s our specialty! Schedule your free call now to get our insider recommendations on how to make asking for referrals feel more natural AND effective.
To learn more about the truth about marketing for financial advisors and how to unlock the power of LinkedIn to lock down more referrals, watch our exclusive webinar here.