How to optimise your referrals

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The majority of business for planners is likely to come from referrals. Fiona Mackenzie of Macquarie Practice Consulting says their studies have been consistent over five years in showing that referrals from existing clients and accountants are the key sources of new business for financial planners.

“If you think about it from the client’s perspective, they realise it’s difficult to make that decision, to know who to go to; so they look to people they can trust – people such as family, friends, accountants and the likes,” she says.

In terms of building a commercial referral relationship, there are three key things to get right:

  • Make sure there is a good fit between your businesses, says Mackenzie. “Make sure they’ve got a similar client base, similar level of service, and that the product mix is complementary.”
  • Make sure you’re both equally committed to the relationship and to making it work.
  • Ensure clear communication about expectations. “What constitutes a lead, what does that look like, how many are you expecting, how will you report back?”

Mackenzie says that working through these key points is vital to making these relationships work, and bringing in new clients and new business. She said it is also important to ensure that the partnership is mutually beneficial. Macquarie have found that people are not spending enough time nurturing their referral relationships, she says.

“Taking a set and forget approach isn’t going to work. Your referral relationship is going to want to know what your position is, and really need to see you taking leadership in that…showing your confidence in terms of what you’ll do with clients and how you see things working out for them.”

She said it was vital that planners review everything they offer their clients, because a changing environment means that what might have been the key to your success in the past, is not the formula for success going forward.

“It’s really important to be reviewing all the pieces about what you offer your clients, what they value, how you put that together, your pricing, all those pieces – it takes time and energy, but it’s really important to get that right.”

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