Who doesn’t love getting business referrals? Not only do they carry the credibility of word of mouth, but the acquisition cost is negligible. Yet many advisors find it difficult to get accountants, lawyers and other professionals to direct business their way. So, what’s the secret to building a successful referral network?

Developing and maintaining relationships is the key, says Rosemary Smyth, a Victoria-based business coach for financial advisors. Smyth cites one Toronto advisor who receives about a referral a day from one of the five accountants in his professional network. Other than maintaining that network, he does no networking or prospecting, she says.

This advisor’s success is the result of a long-term investment of time and energy, Smyth notes. “He focused on the high-net-worth space when he started 15 years ago and, as he gained clients, he asked who their accountants were. With their permission, he started attending meetings between his clients and their accountants and looked for products and services that addressed their tax issues. His positioned himself as a problem solver focused on delivering solutions that benefit both the client and the accountant.”

Clay Gillespie adopted a similar approach to creating his referral network. The managing director of Vancouver-based Rogers Group Financial says he cultivates pension administrators because he works with retirees.

“Once they know me, I explain what I can do for them,” Gillespie says. “They may not know the rules around starting a RRIF, for example, and I can provide that information.”

Over time, says Gillespie, the pension administrators start referring people to him.

Here are other ways to develop relationships that lead to referrals:

> Focus your efforts
Choose an industry in which you have an interest as well as expertise, says Gillespie. “Join organizations in that industry, write in their journals and make presentations to industry groups,” says Gillespie. “Making yourself known as a trusted source of information will allow you to network much more effectively.”

> Define what you do
Remember that you can’t do everything well. You need to communicate a clear, concise message about where your expertise lies and then deliver on it. And the more you know about the field, the more successful you’ll be.

> Think long-term
It can take years to develop a solid referral network, so don’t expect instant results. Take the time to find professionals that you like and respect and make sure they’re people to whom you can confidently refer your own clients.

“A top-tier COI [centre of influence] will be someone who feels that referrals are beneficial to both of you and will be happy to give you as many as you give to him or her,” says Smyth.

> Exchange information
Find out what your COI is looking for in clients and share what your ideal client looks like, Smyth advises.

> Meet regularly
Meet with your COIs on a regular basis and tell them if you have any changes in your business.

> Be interested
Be genuinely interested in what the members of your referral network do. Don’t just see them as a source of referrals.

> Show your appreciation
Always thank your COIs for sending you business. Smyth’s advisor client pampers members of his referral network by taking them to lunch or on golf dates regularly.