By: Andrew Rosen, CFP®, CEP®

The system of referrals is not unique to the financial planning world; however, it is critical to the people we help.  Referrals are our lifeline.   So, why is introducing a friend, colleague, or family member to us (or any financial planner) the best gift you can give this holiday season?  I’ll explain.

In essence, there are 3 categories of people when it comes to finance handling.

The categories: 

  1. The DIYer. These people “do” it themselves.  However, I typically find them to be “not-do-it-at-allers.” I know it is not proper English, but it describes most of this demographic perfectly.  They are either doing nothing to prepare for the future or they are doing what they can with limited resources and knowledge.
  2. Those who work with a specialist. These individuals have met with an insurance broker, an investment broker, or an accountant who has pointed them in the right direction.  In most cases, though, I’ve found they lack comprehensive financial planning.  Going in the right direction is a good start.  But, having someone by your side to implement every step of the way is an entirely different matter.
  3. Those who work with an independent fiduciary Certified Financial Planner. These individuals partner with someone and develop a financial plan.  Most importantly, though, they work hand-in-hand in order to implement that plan through the years.  These individuals are typically prepared financially.  They have a clear vision of where they are going and how to get there.  It gives peace of mind to know they have an aligned partner to help sift through the financial jargon and help them accomplish their goals.

The problem:

The majority of individuals fit into categories 1 and 2.  They lack the guidance to truly control their finances.  You see people talk about it, know about it, but don’t act on it.  For example, how often have you heard someone mention their financial illiteracy?  Let me give you some examples I’m sure you’ve heard:

  • What benefit choices are you making on your open enrollments?
  • How much are you putting in your 401(k)?
  • What investment options are in your 401(k)?
  • When I can retire?
  • When do I take Social Security?
  • When should I get “that” (i.e. estate planning, college savings, proper life insurance) done?

The list goes on and on.  Without a financial planner it’s easy to lose your way when it comes to finances.  Often their quiet screams for help go unanswered.  Remember the feeling when you were first referred to a financial advisor?  Think of that the next time someone in passing mentions their financial woes.  Be a powerful influence in their life.

Why don’t referrals happen more?

I have a few theories for why people don’t introduce financial planners more.  For starters, it seems many think the conversation of “are you being well taken care financially” is the same as “tell me about your money.”  This couldn’t be further from the truth.  The former is simply offering to help and share an excellent service.  We do this all the time with other services.  Go on Facebook and see how many times someone tells you about the great restaurant, or an amazing contractor they used to redo their bathroom.

Why should sharing your financial planning success be any different?   What we do can have an enormous impact on your friends lives.

The other reason, I find, is people simply don’t know how to make the connection.  In truth, it’s as simple as:

You: I have someone I like and trust.  Together, we discuss options and work out solutions.

Friend: Really? I would love that.  What is their number?  I’d love to give them a call.

You:  You know what, I’ll do you one better. When I get back to my office, I’ll send an email introduction. That way the two of you can get better acquainted.  Sound good?

Friend: Thanks! I really appreciate that.

See how effortless and simple it was to change someone’s life?  I’ve found that after the first time, it gets easier.  You’ll be excited to help them out and make an introduction.  It’s better than just giving your friend the number and them forgetting about it.  These are the ways you can effect change in the lives of those you care about.

Why they need you to introduce?

There are two main reasons.  One is they need to work with someone they can trust.  The best way to gain that trust quickly is to work with someone others trust and respect.  Our babysitter, whom we love, was a friends’ referral.  She couldn’t say enough good things about this babysitter. (Thanks again for introducing us, Karen.)  The babysitter came over and seemed nice.  We then left her with our kid’s lives in her hands, literally.  Think about that.  We met this college girl for 10 minutes.  She seemed capable and thus we let her watch our most prized possession.

The other reason is lack of follow through.  Although there are 100’s of micro-moments to warrant contacting a financial planner, few actually do.   Contrast this with other service businesses like Accounting or Physicians.  Every year the IRS forces you to do your taxes and thus instantly an accountant is on your mind.  If you break your arm, or hurt your back, you go see a doctor.  More times than not, people know the need for a financial planner is there.  But, many ignore the need in fear of what they might uncover.

Do it for them not us.

At our firm, we get 99% of our new lifelong partners from introductions.  It’s greatly appreciated.  (Heck, we even have a dinner thanking our clients for their referrals.)  So, this holiday season, we want you to help your friends, family and colleagues.  An introduction to a financial planner will help them have a better 2018 and a solid financial plan for their future. Whether it be us, or someone else, be sure to take care of the people you love by ensuring their taking care of their finances.

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Andrew Rosen

In his role as Financial Planner, Andrew forges lifelong relationships with clients.  He coaches them through all stages of life and guides them to better achieve their life goals.  For more information about Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.

Find out more about Andrew Rosen, CFP®, CEP®
Find out more about Kyle Hill, CFP®
Find out more about David Levy, CFP®