Practice Development | PLANADVISER January/February 2017

Asking for Referrals

How to position yourself for success.

By Karen Wittwer | January/February 2017
Art by Andrea Chronopolous

Most retirement plan advisers surveyed by PLANADVISER cite referrals as their favored source of new business—nearly two-thirds of those responding to the latest PLANADVISER Practice Benchmarking Survey expect referrals from business partners to be their main source of new business, and more than half think existing clients are an equally good source.

Yet, knowing how to ask for a referral is still key to getting one.

For Michael Kane, managing ­director of the five-office Plan Sponsor Consultants, headquartered in Atlanta, asking for a referral is about 90% preparation, 10% solicitation. And much of the prep work is relationship-building.

His top source of referrals is his clients’ auditors. These typically have many problem plans, he explains. “I tell them, ‘We can offer you enhancements to improve your value proposition to your clients.’ If I’m [helping] differentiate them from other audit practices, I have a friend.” Similarly, Kane periodically invites ERISA [Employee Retirement Income Security Act] attorneys to speak at breakfasts for potential clients. In both cases, he says, “you’ve developed a relationship with a center of influence.”

To seek referrals from current clients, he created the “stewardship annual report,” which details the services he supplies each sponsor and how these are improving its plan. Reviewing the report with the plan committee “sets up a very positive situation where you can ask, ‘What contacts do you have—either CFOs [chief financial officers] or HR [human resource] directors—who we might be able to at least introduce ourselves to?’”

The close of quarterly investment committee meetings is another good time to pitch, he says. Something like: “Maybe one out of 100 prospective plans we look at or do fiduciary testing on is in the shape yours is in. You’ve got to know people through SHRM [the Society for Human Resource Management] or through CFO groups who we might be able to help.’” Publishing a survey of his clients’ priorities for 2017, whereby they can learn from each other, affords a further “opportunity to sit down with them and go over it, to show we’re doing something positive for them, and following that, we’ll ask for referrals.”

Jason Chepenik, managing partner of Chepenik Financial in Winter Park, Florida, also prefers an indirect approach. “It’s really asking for advice,” says Chepenik, who traces about 80% of his current business to referrals. “If you go to a client and say, ‘I have to ask you for a reference,’ oftentimes, they clam up. But everybody likes to be asked for advice. So if you say, ‘Can I ask you for some advice?’ they’ll always have a cup of coffee with you or take that call, and you can say, ‘I’m looking to add a couple clients in these areas. Do you know anybody there?’”

Sometimes he has a specific target in mind; then he researches that person online, particularly on LinkedIn. “So, I can say, ‘I see you’re on the board of directors of this nonprofit with this person. Would you make an introduction for me?’” Both men also get referrals through their community involvement. All of these efforts do far more than asking a client to send out multiple emails, which tend to sound “canned,” Chepenik says.