Clients who are happy with their advisers but are not referring them to others may not be aware the business is trying to grow, said IOOF's head of sales, Geoff Kellett.
Speaking to ifa, Mr Kellett said that advisers who want clients to bring in their friends and family need to ask for it, given those clients already understand the value they are receiving.
"If clients are happy with the advice and value that's being delivered by their adviser – and they're aware of the positive impact that it's making on their wellbeing – then it's actually a benefit for them to refer friends and family," he said.
"However, it may not be front of mind for them. I think [advisers] need to create that sentiment in the client's mind that you, as an adviser, are passionate about what you do and you're looking to provide that service to more people."
Mr Kellett's tip comes as IOOF released a white paper recently on how advisers can grow their referral networks. The paper lists three steps to gaining new clients, which include earning the referral, asking for it and then rewarding the client for referring.
"The first one is earning the right to ask for referrals, which is really around having a compelling value proposition that clients are aware of," Mr Kellett said.
"What we're really talking about here is clients' broader life goals. So instead of focusing on the particular quantitative, short-term results, [we need] to focus on how clients are going towards reaching their longer-term life goals."
As for asking clients for a referral, Mr Kellett recommends implementing a step in the process where the adviser encourages the client to refer.
"So this could be at the full-year of part-year reviews, at regular events, in communications [advisers] put out to clients," he said.
"Remind them that referrals are valued and that the benefits that they're receiving from their advice relationship can be extended to their friends and family."
After the client has made the referral, Mr Kellett believes it's important for the adviser to acknowledge it. But rewards do not need to be financial – small gifts like a bottle of wine will do, he said.
"They are not doing it for a gift or money. They are doing it because they care about the person they are referring," Mr Kellett said.
"I think the key is encouraging your client to talk to their family and friends about the benefit that they're receiving. Not about what fees they might be saving or returns they might be getting, but how it's really benefiting their life."
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