Before being referred, you must be referrable

By Jeff Thorsteinson | December 21, 2004 | Last updated on December 21, 2004
5 min read

(December 2004) Admit it. Referrals don’t occur as often as you would like. Over the years, you’ve been told that referrals will flow in when you ask your clients for them, show up on time, and deliver good service. In reality, that’s expecting far too much of your clients – and leaving your success to chance.

Some advisors have turned referrals into a strategic advantage. These seasoned veterans use referrals as a way of filtering opportunities in the market — if you’re not referred by a centre of influence, you can’t be a client.

Other advisors have implemented a referral strategy while weathering scary times. Instead of spending 20% (or more!) of their gross income on marketing, they now spend a quarter of that and focus on a niche market of high-quality referral sources.

It’s clear that referrals cost little to acquire and don’t require a big sales effort. In addition, receiving a steady stream of referrals reaffirms that you’re doing many things right. So let’s identify those "right" things and focus even more intensely on them.

Referrable advisor vs. everyday advisor

It’s important to visualize a growth-by-referral business model by contrasting two types of advisors: the referrable advisor and the everyday advisor.

Referrable advisors have a clear understanding of how to articulate the value they deliver, because they focus on one or two target markets. Referrable advisors:

  • have a higher degree of familiarity with their ideal client;
  • have a process to distinguish themselves from the competition; and
  • operate in a proactive environment.

Everyday advisors typically do the opposite.

Systemized franchise

Because their practices rely exclusively upon referrals, referrable advisors recognize the need to systemize their business much like a franchise. Referrable advisors continually "wow" their clients, their prospects, and their professional centres of influence with their ability to deliver wealth management solutions and client service. This systemization allows them to consistently deliver on their promises and to demonstrate to the market that they are in full control of their business — rather than the business being in full control of them.

Everyday advisors have nothing of distinction to talk about.

Referrable advisors have more control over who they take on as clients because of the way they acquire these clients. Clients of referrable advisors have a higher degree of loyalty, higher response rates, and don’t "price shop." They also know they can purchase investment products anywhere, but what they can’t find just anywhere is a structured solution to their wealth management needs. So they look to their referrable advisor for total wealth management solutions. And for that, they are willing to pay.

While you may think that the world of the referrable advisor seems too good to be true, it’s actually achievable. In fact, you probably have many of the building blocks in place — you just need to package yourself to be referrable. How do you do that? Start by addressing three referrability factors: value creation; systems; and teamwork.

1. Value creation

In order to be referrable, you need to make it easy for people to understand how you add value to their lives and be able to communicate this value to them.

Essentially, what you require is a value proposition statement that answers a few basic questions:

  • Who are you?
  • What do you do?
  • What can a client expect?
  • Why would a client want to do business with you?

This statement is important not just to communicate your value but to also filter out those people you don’t want as clients. Having a well-articulated value proposition means you’ll be engaging in targeted growth. This is especially important when you are educating your referral sources about how to refer you.

For more detailed assistance in communicating your value proposition, AIM/Trimark currently has a program for advisors. Franklin Templeton Investments, through its enRICH program, also has excellent practice management tools to assist in articulating the value that you create for clients.

2. Systemizing your business

It is important to remember that your value proposition is only a set of promises. You’ll need the appropriate systems if you want to deliver on those promises. Solidify the following two systems in your practice and you will have gone a long way towards providing clients and professionals with the confidence to refer you:

  • Wealth management process: The investing public wants advisors who can deliver a complete spectrum of wealth management services: investment advice, insurance, debt management, family issues, tax strategy, estate planning. To become the referrable advisor in your market, put together a "best-of-the-best" advisory network of professionals who can deliver these services to complement what you currently offer your clients.
  • Client service activities: These activities support your wealth management process and also drive your calendar and the calendar of your team. For example, client reviews, client communication and special events will be determined and scheduled in advance so that clients know what to expect from you. Each team member will be clear on their instructions and roles to ensure the delivery of high-calibre service.

3. Teamwork

With your articulated value statement and systems in place, part of your growth-by-referral strategy is to coordinate the people who will be talking about you. Referrable advisors have an expanded concept of who their team is. It is made up of a number of constituencies in the community: your direct team, clients, prospects, professional centers of influence, and even your suppliers.

Your direct team must be trained to deliver a 30-second, 5-minute, and 20-minute talk about who you are, what you do and how you do it. The team must also be calibrated to deliver client service much like the concierge floor at a top hotel. Clients need stories to tell to their friends. So empower your team to do great things, and let the stories flow.

Clients and prospects are considered part of your team. Therefore, you need to ensure that they are kept in the loop about how to refer you new business. They must be able to communicate to their referrals in much the same you do with your team, but with the added ability to describe your service as a life-changing event. The best way for clients to refer you business is to continually remind them about their situations prior to working with you, where they are today, and how you’re helping them achieve their life goals.

Professional centres of influence are also considered part of your team. You must remind and educate these professionals about what your ideal client profile is so that they refer only that type of client to you. Members of your professional network must be able to articulate the value you create, as well as deliver a brief talk to their own clients about how you can help them.

The best part about being a referrable advisor is that the activities that you engage in to make yourself even more referrable will automatically enhance the value of your practice, while helping beat your competition. Once you are able to articulate value, systemize your business and coordinate your teams, there will be no reason for your prospects to look any further, and no reason for clients to leave.


Jeff Thorsteinson is the creator of the YouFoundation, an organization that has helped advisors build world-class practices through innovative concepts, tools, and systems since 1993. Contact or 1 800-223-9332, ext. 21, for more information to help you build your referral business. Or visit the website at


Jeff Thorsteinson