History: Benchmarking Advisor Referral Processes

Jan 11, 2018


I closed last week’s Practically Speaking blog with a question.  How referable are you anyway?   To answer I talked about a new concept called the Referability Index, a one-of-a-kind benchmarking tool that can help an advisor take an objective look at their practice to really understand how they could improve the quantity and quality of referrals they get.  As you can imagine, I got quite a few responses and questions.  I thought I would take time in this blog to answer a few of them.

History (if 2016 is really history)

Late in 2016 I was on a call with Steve Wershing of the Client Driven Practice and Julie Littlechild of Absolute Engagement. Steve and I met while panelists on a 2013 Investment news webinar, and we have maintained a great working relationship. In fact, most of the time, Steve and I agree on topics like referrals but it is fun when we don’t, like this post on client advisory boards vs. focus groups.  And while I can’t remember the first time I met Julie, it’s been at least 10 years or more. Her post featuring a chapter from her book was one of the most read on Practically Speaking last year.

On that call with Julie and Steve, they discussed trying to put together a research piece on best practices around advisor referrals. They wanted to solve the riddle of Julie’s research that advisory firms received referrals from just 4% of clients, yet 33% of advisor clients said they have given a referral in the last 12 months. They wanted to capture the best practices of highly referred firms – what set them apart?  In addition, and more importantly, to create a benchmark—a score that an advisor can measure how referable they are with tools, tactics and a plan to increase their referability. As you can imagine, we jumped at the opportunity to participate in this unique study and in early 2017 helped launch the research.

Jumping in to action

Julie and Steve conducted the survey from March 15 – April 1, 2017 and more than 520 advisory firms participated. The participant results were broken down into four groups from Not Referable to Highly Referable. (A highly referable firm had a median number of 20 referrals last year, and a not referable had only 1.)  Remarkably, there was no one tactic or tool that made those highly referable firms referable; it was that they had a framework—a system—certain things the highly referable firms do that correlated to being referred. And those became the basis for the research paper: What Makes you Referable:  The Elements of Advisor Referability.

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The Framework

If you read the paper, watched the webinar, or listened to the podcast you know that the framework includes:

  1. Know your target client and their unique needs and wants
  2. Talk about those clients and their needs frequently
  3. Customize your offering to your target client, differentiating yourself
  4. Develop a marketing plan aimed at those target clients
  5. Emphasize your differentiators when communicating about your business
  6. Involve your clients in the experience
  7. Develop your staff
  8. Have a system for attracting referrals and how to handle inquiries
  9. Strategically manage your digital footprint

It is great to have the framework.  However, the framework lacks objectivity. For example, I can say that I (#1) know my target clients and their needs and wants. But do I really?  What if I say that I work with women or maybe retirees; aren’t those really too broad to be considered niches or categories?  Who is going to call me on that?


Upon completion of the paper, we hosted a series of lunch and learns to review the research and share tools to help.  Hundreds of advisors attended and have started down the path of creating more referable businesses. We’re also acting as a personal trainer, an objective and motivating voice as advisors use the tools. However, Steve and Julie are not done.  Coming soon, they will be launching the referability index-benchmarking tool that will score an advisors’ referability using that same research from the paper.  (Advisors working with SEI have an early view into the index now and discount pricing.)

In a recent post, I discussed lagging indicators of success versus leading indicators. Personally, I think the benchmarking process is a gift to all advisors who want to have a better handle on their success.  The Referability Index is just the type of leading indicator that will show how healthy your business is and what you can do to grow it.

Want to know more?  Call or email your SEI relationship manager or me at Janderson@seic.com

The opinions and views expressed herein are those of Steve Wershing and Julie Littlechild. SEI bears no responsibility for their accuracy. Steve Wershing and Julie Littlechild are not affiliated with SEI or its subsidiaries.


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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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