Requesting referrals ranks slightly above dealing with auditors on an advisor’s professional stress index. The request can mean asking a favour from a client, an uncomfortable move that threatens the equilibrium of a professional relationship. Meanwhile, an advisor often feels compelled to make the request, seeing referrals as an important component in practice-building strategies.

As an alternative to traditional referrals gathering techniques, advisors heard a tightly-choreographed process at the 5th World Critical Illness Insurance Conference from Duncan MacPherson, co-founder and co-chief executive officer of Kelowna, British Columbia-based Pareto Systems and Pareto Platform.

“It is not a collection of tactics or strategies or clever things to say at the right time,” he said, during his presentation entitled Fast Track To Referrals, also the title of the referrals module licensed to Standard Life Canada and one part of the 31-part Pareto System.

Through the roof

Advisors have seen referrals go “through the roof,” he told The Insurance Journal during a follow-up telephone interview, although he conceded that he does not have any formal comparative before-and-after data.

In Step 1, The Shift From Salesperson To Consultant, he defines attracting referrals as a purpose and process instead of “a one-off event.” This step includes gaining an understanding of reasons why the advisor’s “referability” has not reached desired levels. That may involve scripting and role-playing. For example, the advisor may ask how the client responds when someone asks about his or her advisor.

In Step 2, Promote With Precision, the advisor evolves from a salesperson into what he terms a “more professional consultative” entrepreneur, as opposed to the advisor-as-salesperson type of practitioner.

Step 2 includes the three ‘A’s which help determine the fit between advisor and prospective new client. The first ‘A’, assets or action, points to the potential client’s available assets in the investment context and action in the insurance context, meaning the degree to which the client empowers the advisor in insurance decisions.

The second ‘A’ refers to the client’s attitude, he explained, suggesting that a client with what he termed “great assets and a lousy attitude” leads to a slippery slope.

“Can you afford to work with a client who is perpetually focusing on what you cost rather than what you’re worth?”

The third ‘A’ refers to advocacy by the client. Advocacy and therefore “referability” flow from trust, he said, suggesting that trust flows from the “four C’s,” all of which reassure the client or prospective client.

Consistency means that the advisor and team conduct business in a consistent way with no deviation from established procedures. Congruency occurs when the advisor does as promised. He defines the third ‘C’ as chemistry and the fourth ‘C’ as credentials. “If I am consistent, congruent, if I have chemistry and if I have the credentials, then I am building trust and therefore I am referable,” he told The Insurance Journal.

In Step 3, Reciprocation vs. Obligation, the advisor takes what he calls ‘a panoramic and all encompassing view of what could be undermining “referability.” Some reasons suggested by practitioners present at the session to explain why clients choose not to refer included a view that he or she is a salesperson, or that they are waiting for the advisor to establish a track record.

In Step 4, Don’t Leave Referrals To Chance, the advisor avoids looking ‘needy’ by asking for favours. “Never bring your needs to your clients,” he said.

During the prospective client meeting, the advisor accomplishes this delicate task by mentioning value-added services that he or she provides, such as acting as a sounding board for clients’ friends or relatives who have become worried about their current advisor or volatile market conditions.

In Step 6, You’re Ready to Launch, the advisor has mastered the process with new and prospective clients who have no preconceived ideas of how the advisor conducts business. Afterwards, the advisor can send a letter to existing clients notifying them of the services provided.

Step 7, The Law of Attraction, calls for the advisor to undertake ongoing continuing education in marketing, practice management and business development, ensuring continuing attractiveness to client advocates.

Al Emid