Unlock a steady flow of ideal referrals by fixing two often-overlooked constraints—lack of focus and lack of framing—with these insights from Dr. Jon Randall.

If you’re interested in learning more, please visit: xfa.coach

Dr. Jon Randall is not affiliated with Hartford Funds.

Hi, I'm John

and I'm Julie.

We're the hosts of the Hartford Fund's human-centric investing podcast.

Every other week we're talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

Let's go!

Jon, welcome to the Human Centric Investing Podcast. It's great to be here with you today.

Thank you so much for having me on. I'm such a fan of the podcast. I love it.

Well, Jon, today's podcast, we wanna talk to you about referrals. Now, I think for the 38 years that I've been in the industry, we've always been talking about referrals in one of two ways. Either people are looking to build more referrals because they're growing their business, or they're like, I don't need any more referrals because so many are coming in, but we're not gonna talk about either of those today. We're really gonna kind of focus a little bit more to talk about right referrals, right? And We're really interested in, we know that you work across the spectrum with many different teams and financial professionals, but we really want to talk to you today about those nuggets that you can provide our audience about some of the things you see going on, good and bad, when it comes to generating the right referrals, not just a certain number of referrals. So... Well, with that as a lead in, why don't you tell us a little bit about what you've seen out there and maybe some of the ways we can improve it.

Yeah, there's so many different ways to grow a business and especially in the financial professional services space. There's, I'll give you four categories and almost everything falls into. There's cold outreach, right? When I was a new advisor, we cold called people. Uh, there is content marketing is a very misunderstood marketing. That's your, your content that you put out. Uh, not a lot comes from it, but it's where people check you out. Right? If, if you Google somebody, you're probably going to see their social links. Uh, many even be their LinkedIn profile might be higher than the webpage. Uh, there's ads. So you could do local advertising. Um, you can do, uh, uh like advertising on social media platforms, like YouTube, like Meta, which is Facebook and Instagram, which has catching on. And then there's organic, which was traditionally been the majority of new clients that financial advisors get. A distant second is referrals from other professionals like CPAs, but by far, year after year after year, financial professionals get most of their clients from referrals from existing clients. So that's why it's talked about a lot, but it'd be great to dive into what are the elements of the advisors that get the most, right? The second advisor you've talked about, they have too many referrals coming in. What an awesome problem to have. Right? That's that's a good sign that there's good things going on. Most advisors listening, though, or most financial professionals are wishing, Hey, I wish I had more coming in here. How can I turn on that faucet? So we can dive into that here.

Absolutely, we would love to, because Jon and I hear this a lot, that advisors either are receiving referrals from the wrong type of client, right? Not the clients that they're looking to replicate or they're just not receiving them at all. So let's dive in and maybe talk about how they generate more referrals, especially from the clients, that they are looking to replicates.

So within getting more, there's two constraints that I see very commonly. And the first one has to do with focus. So if there isn't any focus on where you're going to get referrals from, everything's going to gravitate to the mean, right? So your average client is going to refer another average client, right. Then you start to get this bell curve kind of business that most of your clients are just average. They're really good clients who want to duplicate. It's not really that special for an experience for them, right, you're not going to duplicate them. So to really move like a standard deviation up and do more with those really top clients in your practice, as we talked about last episode of optimizing what you do with clients. If we can focus more on them, that's really your leading your path to get to other people just like them. And so there's this concept of niche marketing and. Episode one 55, you had a wonderful episode that everyone should go back and listen, uh, a wonderful story of an advisor who is, or financial professional who is going and narrowing on one singular market, right? And it's kind of so big, they do it all over the country. I love that. So really that's a level of hyper-nitching. It's going so deep that you could be the only financial advisor in that small pot, and I'll give you some examples. One of the most common things I hear advisors say is I work with business owners. All right, there's 34 million in America. That's a lot, all right? That's lot. And most of them don't even produce over 50,000 in revenue in most businesses in America, so like what's our focus, it's pretty wide. It's gotta narrow down to be very specific. Like maybe it's someone that owns a car dealership. Maybe that's someone that owns multiple car dealerships. Maybe someone owns multiple card dealerships of a specific brand in a very specific part of America. And there's five of them, and one of them's your client. Now, to break into a pond that small, if you don't already have access, it's gonna be too difficult. So you should look at the top clients or the clients you wanna duplicate, right? It might just not be they have a lot of assets and they produce a lot revenue. You could also look at your ease of delivery. I've had advisors say, if I just had a hundred more of these clients, I would be sad. I just, I just like them. They're easy for me to handle. I know everything about them. Right. So who are the ones you really want to duplicate and you got to investigate and go deeper and deeper and deep. So a medical professional, all right. There's many millions of those, right? How can you narrow deeper on that? And you've got to look at your, your clients and look at how specific can I get right, that they might be a doctor or there might be. There may be an orthopedic surgeon. There might be a orthopedics surgeon that specializes in athletes. Might be an Orthopedic Surgeon that specializes at athletes at XYZ University. Right, that specific. And there's only a small number of them. That's really out of hyper niche. I find advisors are afraid to go to that level of focus. And if you have only a few small ponds that you're trying to work to get to the other people like them. One pine might not work out, right? You can't do this with 10 different pines. You gotta find what's a small number of them that you could go to that level that there's probably no one else that specializes in that specific type of person. So that's really step one is how can you identify with an extreme level of depth that exactly who your clients are. And that ones that have access to others like them, right? If they're a unicorn and there's no one else like them. This isn't somebody that you would want to duplicate. It's the ones that I have access to others, like them would also be good clients is great. So employers or profession is a common one, right. We do that because it's a lot of time that people spend. That's one of the easiest, I think hyper niches that people can find. But there could be other things too, like where somebody lives or an activity somebody has. Or a club they belong to, right? There's a infamous story about an advisor that's gone so deep with professional bass fishermen. Their father was into this. And for most of them, it's a hobby. It's not their main profession. And it takes a lot of money to do this. So they're very affluent people that are in this particular sport. And this advisor is like dominated in this really, really small, you know. Uh, pond, if you will not to make too much of a pun here, but it's, it's really, it, it's there, right? It's, It's really identifying the, Hey, I have this person has access to all these other people just like them that I know everything about. That would be really easy for me to help these people. That's what you're looking for. And I tell you what this business becomes so much easier, so much easy to be a financial professional when you're helping a lot of similar clients, right? Delivery is much, much simpler. So one is finding them. It's going to a level of focus that you're currently not going to. We'll go to the others, but what's each your thoughts on this?

I've seen it so many times, Jon, I can remember working with advisors who specialized in the oil and gas industry in West Texas. Another group that specialized in dentists and dentists who were acquiring, dentists to were selling. I've see it so much times utility workers who all work for the same utility and they've amassed large retirement plans. And what I thought was most interesting is When you work with a group, a select group, a narrow group like that, you typically know what the major risks are in their business and their lives, right? So you can help them think about how to defend against adverse events. You know most of the retirement plan options they're typically looking at. So you could almost begin describing to the client before they've shared anything with you the type of plan they already have set up, which immediately goes, wow. This person knows me before I even shared anything with them. And just that competence, not competence, but that boost in saying, I really trust this person. I think it's great. I mean, I think what you said is right, especially if my practice is younger and growing, I may have to give some thought. Maybe there are two or three areas where I specialize and to start with. But I love it because I think. It helps self-identify with clients. We have a research partner that Julie and I know well that we do a lot of work with. And he says, the best thing you can hear from your clients is the reason why we do business is because you get me. And when we start developing a specialty in a narrow pond like that, as you say, we become the ones who's trusted and those referrals just keep flowing. Julie, have you seen the same thing?

Absolutely. I think understanding your client's profession or the world that they're in and speaking their language, if you will, and anticipating those changes or needs or decisions, it's huge. And I think it's an interesting point that oftentimes financial professionals don't know where some of these niches could be. They haven't stepped back and sort of analyzed their book. And understood, oh, I do have three physicians, interesting, and they're actually more closely related than I thought. And so starting to go through that process and really look for some of that, I think can also be incredibly beneficial.

And Jon, one other experience, kind of funny to think about. Julie, I'm sure this happened to you. We had a financial professional who was working with a certain group of clients. I think it was oil and gas at the time. And the one that did a lot of business with these folks, we did client meetings at their favorite honky tonk with sawdust on the floor and another financial professional invited them to come to his posh country club. Right? Where they felt like a fish out of water. Guess who got the business, right? It's about knowing the client, knowing as much as you can about them and making them comfortable. And that's what we get more used to when we develop those niches. That's awesome. But I want to hear about some of the other things that you mentioned as well.

Yeah, one thing I'd say on this for listeners, you might not stay in these pawns forever, right? If you find a pawn and it makes your career awesome, right, I've seen that happen for people lately, because it might be an industry, it might be an employer that you just crush it and it makes your career wonderful, wonderful. If you find that it's just not everyone, right. Not everyone has access to that. So it's likely you want to work up to three pawns at a time, right and see what you can get. And if you get four to five clients that are that are in that pile, you're probably not going to get the fifth. That's okay. Then it's time to move on to that next one, right? But we're trying to get larger clients faster, right, instead of getting 10 clients with a million, why not get one client with 10 million, right. It's a lot less work. So that's really the thinking to go in here. So advisors are just, again, they're afraid to just dive into these, but something's going to hit if you're working a few of them. So then The next level of this, the next constraint that comes up after focus, once you get to level of focus, you identify these are the clients that are in these ponds, at the level of depth and clarity that I need. Now the next constrain is framing, is how do you frame with these clients that they are the type of people you help best? And anyone listening, any financial professional out there has probably gotten random referrals in their career. I did when I was an advisor. And the reason we get random referrals is there's a lack of framing. That's your signal, all right? So if you get somebody's kids who aren't really a fit for you, I mean, I'm a fan of helping out the kids to help out the kid, but that's the only referrals you're getting, right? That's not your target market. If you're someone's brother or neighbor and they have no money, right, that's not, that's your target marketing. It's how do you duplicate your best people? And we've got to frame with these people in these ponds that you, specialize in helping people exactly like them. So we've got this whole framing that is actually the ultimate referral position yet doesn't even feel like referral positioning. All right, all of these referral positionings that are out there, they're great. There's many of them. I'm friends with some of the people that have invented some of these, but they all seem to lack this element of framing, of being very specific about who you can help best. So in the framing, it really is identifying specifics about this client. Right? Like you are an orthopedic surgeon that specializes in athletes at XYZ University. You're exactly the person I know everything about. I really enjoy working with you. And when you frame the things that you enjoy about working with them, as far as things that can see with others, that's kind of the secret here. So you're calling out the avatar, which is just the fancy name for Target Market, right? If you're call them out, you're exactly this type of person. And then you can even name some of their qualities, right? You're really busy and you outsource this. We handle this for you. You're open to new ideas. You implement the ideas. You want someone to do X, Y, Z for you, right. It's naming the qualities of that person that really makes them a great client that they can see in others. They might not know the AUM of another person, right, that they work with or another person at their club, whatever your small pond is. So you have to name qualities that they can see in others, but it's really critical that you call out that avatar, that exactly that target, that you are the type of person I help best in. Sometimes top clients don't even realize that they're top clients. A lot of times they think, you know, when I did this, my practice, people really, I thought it was just a regular middle client for you. I had no idea. And so it's kind of flattering for them to hear that, Oh, wow. You're the type person that you enjoy working with the most. And, and I'm a really good client for it and makes them feel really good. And so the only thing you can really influence when it comes to referrals is when someone goes back to their pond is their antenna is up in their radars on. It's really all you can do. All right. The, the referral techniques of, you know, write down the other five people in your pond, right? It's awkward. They're not going to have someone on the spot, especially if you're doing it after a long meeting. I'm sorry, but people's financial tolerance is not as high as yours, financial professionals. They're grinded out by the end of your meeting, I can guarantee it. And to add on a referral ask at the end of it is usually a wasted effort. So you could do this framing completely separate from any conversation. It could be just hey, hey, Julie, hey Jon, thank you for being a client. You know, I just wanted to share with you, you're one of the people that that I feel like we help best. You're our ideal client, let me tell you why and you go through those particular areas. You have to do is just say if there's ever anyone exactly like you, I'll make time for them. But it's the framing part, that's the one that people miss. They're afraid to go to that level of specificity or they just don't know who it is, but they don't really call out, right? They just say, hey, I'm open for referrals, right, or they don't say anything at all, but it's really helping them see who you can help best. And when advisors do that, that really increases the quality of referral. And that puts them in a space where, okay, I need less new clients coming in because I don't need. You know, again, I don't need 10 half million dollar clients, I can just get one $5 million dollar client, same amount of revenue for one 10th of work, right and a 5 million AUM client isn't that much more work than a half million AUN client. So that's the kind of things we're after there. But it's focus and it's framing. It's the two constraints we see all the time that really limit the practices from getting as many organic referrals as they could.

Do you find that there's a fair amount of assuming happening on both sides of the coin? So financial professional is assuming that clients know that they're open for business, if you will, or taking on new clients. And clients are assuming that their financial professional that maybe is well-established, successful in a community is like the physician that is not taking new clients, and so. Know, without having this conversation, do you find that there are a lot of assumptions being made and so then no one dips their toe into the referral waters, if you will, because it could get awkward.

Yeah, I think you assessed it perfectly, Julie. It's a lot of assumption. I think a lot clients don't realize, oh, maybe the advisors or the financial professional on some kind of salary, they don't need any business. The institution they're with, they just give them stuff. They don't have to worry about it. They may not know, right? They might not have any idea that the financial professionals trying to build a practice, right, and they rely on introductions to others is by far the most. Most common method, the most likely method that that practice is going to build. So there's definitely an assumption with such a perfect word, right? There's assumptions on both sides of, ah, they don't want to give me their referrals, right. It'll ruin our relationship if I bring it up. I'm just not going to bring it up, right, it's easier to do our old ways of not doing anything as opposed to getting uncomfortable and bringing it up and then on their side, They don't know. Right. They don't know that they, that you could help other people or that you're open for business, they, they just don't. No. So there's a delicate balance of being professional, not being a, you know, sleazy salesperson being perceived as that there's, there's definitely some weird elements there. So this is where the psychology stuff is, is fun because can quickly diagnose just things advisors are thinking that holds them back from doing the things that they should be doing or they could be doing that actually work, but I find too, if they're armed, if they see other people walking down that path or further down that path, they get some wording and some things that help them feel comfortable that, Oh, I could say that to one of my top clients. That's not awkward. Like the weird referral asks that I, you know, was, was given by whatever source, if it's comfortable and it's, and it genuine that you really are one of the people I help best. If it really is, it can be much easier, but I think it cuts through the assumptions, right? It gets down to, uh, uh eliminating those quickly.

Jon, do you find sometimes that financial professionals are hesitant to even go that far for fear of the reaction they might get from that client? And my observation is that typically, if I've done a great job for you and we're pretty good friends, as long as I'm not saying to you, hey, can you give me three people? Can you give five? As long as you let them know that, hey, I'm up for business because I think we've done really well together. You know, I think people want to help, you know.

Yeah, they want to be part of a winning team, right? And everyone does. So if if if a referral helps somebody, I think it's great. I've even heard advisors say, if I worked with more people like you, I can work with less people overall and give you more attention and more time and more focus on my recommendations for you, right. So it feels like an incentive for them. So that's really the way we should look at it that this could be a win for everybody.

I've often, I've heard it said once that, you know, financial professionals ought to maybe think of their firms as a membership, right? And membership means there's things that go both ways, right. Sometimes we're so convinced that we need to provide everything, right, but there's also something that the client provides me for being part of this membership. And I think kind of defining what the rules of membership are and why you're a great member of this. Of this practice I think gives people a sense of pride like I am special. I'm fortunate to be able to work with Jon Randall on my financial stuff and I would actually want to help Jon find other right people like me. So I think that's the environment I think you're saying.

If it's crystal clear who those people are, then it helps a lot. Not just fog and mirror, right? Yes, exactly. And I think we have to have a confirmation of value to bring this up, right. If you're not sure if the client really values what you do, an easy way is just ask them. You could do something different like, I want to be one of the best at what we do is helping whatever the target market is. What do you see that we can do better? And most of the time it's going to say, Oh my gosh, you're so great. You just generated a value conversation. Then you can go into, Oh, my gosh. Well, I really like working with you. You're one of my favorite clients. Here's why. And you go through that and you just open the door that always make time for the people like you. It's that focus, that framing. It's, it's really it. There was a whole nother, you know, so that's getting people into your funnel once you get people in your funnel, advisors don't have ways to warm them up, I find so. Geez, we could do a whole episode on this, but there's, we've developed at X of a, a prospect velocity system that really warms prospects up because there is a direct correlation with the larger amount of assets. There's a larger amount time it takes to land them as clients. So how do we condense that time? Right. How do we get them to be in sooner? How do get them buy in the interactions instead of it taking many, many interactions in the financial? Services and it can be a big scary thing for some clients to open the door to talk to an advisor or a financial professional about their offering. I mean, it could be as uncomfortable as going to a medical exam that isn't very comfortable, right? So we have some professionals who also have tax businesses and it's a lot easier to get a new tax client than it is a financial management client, right? It's a lot easier. So there's definitely some barriers. So you need a system that can warm up those prospects to concellerate or what we say, accelerate the timeline for them to become new clients. It's really a big common gap that we see in a lot of practices. So those that want to get really good at acquiring organic clients faster, these are some of the constraints that we've seen that there's lack of focus, lack of framing. They don't have a system or process to warm people up. And once they install those, look out. Growth can come really, really fast.

Jon, if you could leave financial professionals listening today with one mindset shift about referrals that would really change how they approach this long term, what might that be? Especially for those financial professionals that maybe have tried this with no success or they feel really awkward every time they start the conversation so they've just stopped having it. Or maybe they've been, you know, they're in a little bit of a feast or famine situation where they're a couple of referrals dribble in and then nothing happens for nine or 12 months. What would that, what would your words of wisdom be for our listeners today on this topic?

Along the lines of focus, a lot of us as advisors were trained, asked for a referral every single time, right? Every single client interaction that you have and people become numb to it, right. It's not a special conversation. I just think finding a way to bring it up with a very focused amount of people to use the framing we talked about. It's way less effort. And if you're comfortable with it and you try it with a client and they're comfortable with the two, I think they get built some confidence, right? And all the things I learned in performance psychology, and we need to build confidence, even if you are an industry veteran and you've gotten a lot of referrals, you're going to try something new. We need to build confidence with it. So maybe try this with a really easy client that, you know, that whatever you say is buying, right. Jon, whatever you, Julie, whatever, you say that sounds good, right, try this was some easy people. And just work on it a little bit, but it's having the words should give you some confidence, trying it with an easy client or two should give some confidence. And this stuff really works. It really does work, but it it's getting out of the old habits, right? I'm gonna do it every time. I'm going to do it at the end of a meeting when people are mentally exhausted, right. This is a separate conversation done in a very flattering way that isn't cheesy or isn't salesy at all. It's really, really works, but you're right. It's just thinking a little different about it. That's all that it is.

So, Jon, you talked in this podcast about framing, and Julie and I have some framing questions of our own that we'd like to ask you just to help our audience get to know Dr. Jon Randall a little bit better, so if it's okay with you, I'm going to ask Julie to start and we'll hit your rapid fire with a few of our questions.

Let's go, fire away.

What's your favorite place to vacation? Let's just stick to the United States for now. We might go around the world in a second, but if you could go anywhere in the U.S. For vacation, where would you go?

You know, my favorite spot is this little town called Stone Harbor, New Jersey. It is the little sanctuary. Yeah, it is wonderful. It's the nicest beach, cool little town. We love it there.

What's one thing you always pack when you travel?

A quality wine glass. They're not always around. I love that. My wife and I would travel with them. That way we're at, we have good quality glass.

My final question, what's your favorite board game or card game if you play games at all?

Yeah, we have this family game we play. It's it's basically like a progressive gin rummy that we play, I don't know where we call Shanghai have no idea where this weird name came from. But we love playing and we'll sit around my family, my sons and extended family visit, we'll set around and talk and play cards for hours. Awesome.

What's your favorite quote or mantra in life?

Um, I learned this from somebody else, uh, quality creates demand. I, whatever we do, we do at the highest level quality, good things will happen.

Well, we can't thank you enough for your insights here today, especially on the topic of referrals. And for our listeners who are interested in learning more, be sure to check out the XFA website at www.xfa.coach. There are some resources there that you can access. You could also register for an upcoming XFA scaling workshop to help. Get your practice benchmarked, identify your constraints, and look at your growth opportunities, including referrals. So thank you again. We can't tell you how much we enjoyed the conversation and we learned so much from you today.

Thank you both, these are fun. Keep the podcast going.

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Talk to you soon. The views and opinions expressed herein are those of the guest who is not affiliated with Hartford Funds.