When A Referral Is Not The Best Way To Get New Business

It’s been said that the easiest way to grow your business is by getting referrals. Coaches consistently admonish advisors to ask for referrals. Program after program has been developed to help advisors master the process. Some encourage creating advocates out of clients, eliminating the need to ask for them. That sounds like the ideal way to get new business. After all, your ideal clients’ friends tend to be like them. Or do they?
Other referrals from ideal clients may be family members. Wealthy people like to help others so the referral may even be for someone whose assets are below your account minimums. This is where other criteria must come into play. Perhaps the referral is young, has already developed good financial habits and is looking for guidance—and has the potential—to become an ideal client. In other cases, a referral from an ideal client may end up costing you more and becoming a drain on your business. What stories do you have of such cases and how did you handle them?

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