The reason financial advisors ask for referrals might seem obvious, but I'd like to do a little explaining - some reasons you might never come up with on your own.
While it's obvious that most advisors want to grow their practice, it's important that we grow them wisely. For example, if your advisor has asked you for referrals, consider it an honor. This usually means that the advisor values your business relationship and wants to replicate you. There's no advisor for everyone and personalities definitely come in to play. When I ask for a referral, it means that I enjoy working with you and we'd like to surround ourselves with more people we enjoy spending time with and who value our advice.
There are only twenty-four hours in a day. I love what I do and probably put in quite a few more hours than some who have been in the industry as long as I have. For example, I'm writing this on a Saturday at 1:00 in the afternoon. I enjoy networking, speaking in front of groups, and just about every aspect of the job. Having said that, my time is best spent with clients or doing research or investing money, etc. Client referrals are a very efficient way to grow a practice. Any major life event, in any of life's seasons, involves financial decisions. Weddings, births, deaths, career changes, and divorces require a re-evaluation of financial plans. As friends cuss and discuss, referring a good financial advisor can be part of a natural conversation. Afterall, we all want our loved ones to be in good hands.
I'll give one final reason we, like other professionals, ask for referrals. It's only natural that we lose clients every now and then. Clients might move out of town and prefer a local advisor (although after COVID this is rarer) or we could lose a client who passes away if we don't have a relationship with the beneficiaries. It seldom happens, but we could also decide that we're no longer the right team to take care of a client for whatever reason. Again, we'd rather replace clients with people who have a lot in common with our best clients.
Having said all of this, if you think we're doing a good job, please consider recommending us the next time you have the opportunity. If you don't think we're doing a good job, please, please pick up the phone, for crying out loud, and let's have a conversation to see what we can do to rectify the situation.
We sincerely appreciate referrals and are always honored that you'd let us help your friends and loved ones.