How to Recognize Underlying Resistance

With an understanding of the potential psychological factors behind client hesitations in giving referrals, financial planners can focus on recognizing how these underlying feelings manifest in their conversations. The following are examples of responses to listen for, as they may indicate a hesitant client:

Non-committal Responses

“I’ll think about it and let you know if anyone comes to mind.”

This type of response often stems from a client feeling uncomfortable or unprepared to provide a referral on the spot. They might perceive the request as pressuring or worry about inconveniencing their friends or family.

Concern for Colleagues’ Privacy

“I don’t know if I feel comfortable sharing my friends’ information without their permission.”

Clients are often protective of their friends’ privacy. Without reassurances, they may worry about overstepping boundaries by sharing personal information without prior consent, which can be a genuine concern, given the importance of data privacy and trust in relationships.

Apparent Lack of Network

“Most of my friends already have financial planners, so I wouldn’t know who to refer.”

This response can occur when the client feels their network might not present viable opportunities for new business. Clients may also use this as a way to avoid an uncomfortable situation where they feel obligated to come up with names on the spot.

What You Can Do to Help Hesitant Clients

In these situations, it’s crucial to pause and reevaluate your approach. Rather than pushing forward, have an open and honest discussion with your client to understand their concerns and reservations. Create a safe and non-judgmental environment where they feel comfortable expressing their thoughts. Your goal here is not to immediately convert them, but instead to listen to how they see the situation.

By discussing the underlying resistance, you can work together to find a solution that alleviates their concerns and makes them feel more at ease with the idea of providing referrals. Whether you get them to refer clients or not, this open dialogue helps to build trust and strengthen your relationship.

Address Common Myths About Referrals

When discussing their hesitations, you may find that some clients harbor certain misconceptions about providing referrals that keep their resistance high. By proactively addressing these ideas, you help alleviate their concerns and make them more comfortable with the idea of referring others.

Below are examples of potential misconceptions clients may have and ways of responding:

Myth: “Referring someone will make me seem pushy.” 

Reality: Explain that framed as a warm introduction rather than a direct solicitation, referrals don’t come across as salesy or pushy. You are simply connecting two parties who may benefit from knowing each other, without any obligation or pressure. 

Myth: “I have to be more of an expert to provide a referral.”

Reality: Referrals are not about expertise; they are based on positive personal experiences. If a client has had great experiences working with you and believes others could benefit from your services, that’s reason enough to make a referral.

Myth: “Only people with complex financial situations need a financial planner.” 

Reality: While those with complicated finances can certainly benefit from professional guidance, financial planning is valuable for anyone looking to make the most of their money and achieve their goals. Even seemingly straightforward situations can often be optimized with expert advice.

By dispelling these common myths, you can help clients feel more at ease about the idea of providing referrals.

Reinforce the Value You Provide

One of the most effective ways to encourage referrals and overcome hesitation is by consistently reinforcing the value proposition you provide to your clients.

This can be achieved through various strategies:

• Remind clients of their initial challenges and goals: Take a moment to reflect on the circumstances that led your clients to seek your services. Perhaps they were overwhelmed by complex financial decisions, unsure of how to plan for retirement, or struggling to manage their investments effectively. Remind them of these initial challenges and how your personalized guidance has helped them navigate through those personal difficulties.

• Recount successes achieved together: Celebrate the personal milestones and accomplishments you’ve achieved in partnership with your clients. Whether it’s funding a child’s education, increasing their retirement savings, or achieving a long-term financial goal, highlighting these personal successes through effective financial planning can reinforce the tangible value you’ve provided.

•  Create personalized “Value Stories”: Craft compelling narratives that resonate with each client’s unique circumstances. These “value stories” should illustrate how your expertise and guidance have positively impacted their financial well-being. Share specific examples and quantify the benefits whenever possible, making the value you provide more tangible and relatable.

• Help clients see intangible satisfaction beyond just numbers: While numerical achievements are important, encourage your clients to recognize the intangible benefits of working with a trusted financial advisor. These could include feelings of support, peace of mind, reduced stress, confidence in their financial future, and the ability to focus on the present.

By reinforcing the value you provide, you strengthen your relationships with existing clients and increase the likelihood that they will become enthusiastic referral champions.

When Referrals Aren’t the Right Fit

Every client situation is unique, and there could be valid reasons why a client feels strongly about not making referrals at a given time. Rather than viewing it as a rejection, see it as an opportunity to build more comfort around the referral process.

Reflect on how you can improve your approach to make clients feel more at ease with referrals. Perhaps you need to provide more context, better explain your motivations, or find ways to make the process feel more natural and organic.

Additionally, it is worth considering whether you are truly the ideal fit for that client’s needs. Presenting an outside referral can actually build trust by demonstrating your commitment to the client’s best interests over your own.

Stronger Connections with Clients are Great Outcomes

Transforming hesitant clients into enthusiastic referrers requires empathy, open communication, and a focus on reinforcing the value you provide. By understanding the underlying reasons for resistance, addressing common referral myths, and reminding clients of the successes you’ve achieved together, you can create a comfortable environment where referrals feel like a natural next step.

For more insight into how to have referral conversations with your clients, read our blog post, When and How to Ask for Client Referrals.