Business referral in wealth management: grow your portfolio through referrals

Business Referral in Wealth Management

Do you know someone looking to invest? An entrepreneur who doesn’t know what to do with their cash flow? A couple wanting to optimize their taxes? You’ve probably encountered this kind of situation without knowing what to do with it. And yet, these moments are real opportunities to play a discreet but valuable role: that of a business referrer in wealth management.

This mechanism, not very visible but well regulated, allows anyone to put a potential client in touch with a wealth management advisor (WMA) and to be compensated if it leads to an assignment.

What is a business referral in wealth management?

In this context, business referral means introducing a person (individual or legal entity) to a professional in wealth advisory: independent advisor, firm, private bank, or family office. In return for this introduction, the referrer can receive an agreed-upon compensation—provided that the referred client becomes truly active.

The referrer gives no financial, legal, or tax advice. They simply forward a qualified contact. The goal for the WMA is to establish contact with someone they might not have otherwise reached.

Who can become a referrer in this sector?

The most common profiles are:

• Related professionals: accountants, notaries, lawyers, brokers, real estate agents

• Entrepreneurs with a strong network of executives or investors

• Private individuals well connected in specific circles (business leaders, liberal professions, high-net-worth families)

• Micro-entrepreneurs who want to offer this service under a legal status

Since wealth management is a regulated field, business referral is carefully supervised. That said, it is perfectly legal, as long as certain rules are followed and the role is limited to making a simple connection.

It is essential that the referrer does not go beyond their role: they must not advise the client in any way, at the risk of falling under the financial advisory regulation (and needing to register with ORIAS, or obtain a professional certification).

In what situations can a referrer be useful?

1. You know someone who has inherited and is looking to invest their money.

2. A couple close to you wants to prepare for retirement but hasn’t yet met a trusted professional.

3. A company sells a real estate asset and wants to structure the use of the capital.

4. A business owner is looking to optimize compensation or prepare to sell the company.

How does the compensation work?

The compensation is variable but always governed by a business referral agreement. It can take different forms:

• A fixed fee, upon signing of the contract between the WMA and the client

• A percentage on advisory fees or assets under management

• An indirect commission, when financial products allow it (in compliance with regulatory transparency)

Some indicative examples:

• Referral of a client investing €100,000 in life insurance: potential commission between €300 and €1,000

• Referral of a business owner under a full advisory mandate: could represent a fixed fee between €500 and €2,000, depending on the agreement

• Introduction in a complex wealth strategy context: customized compensation

Everything must be clearly written, typically in a collaboration agreement signed by both parties, and compliant with current legislation.

Business referral in wealth management: key rules to follow

Wealth management is a highly regulated sector. To keep the practice legal and ethical, you must:

• Never give advice instead of the WMA

• Sign a clear contract with the partner firm

• Respect the confidentiality of the information shared

• Inform the final client, who must know that you introduced them and that this could result in compensation

Benefits of the model

For the referrer:

• A smart way to monetize your network

• A complementary income source, with no client management

• A valuable professional relationship with advisory experts

For the wealth advisor:

• Easier access to a hard-to-reach client base

• Time saved on prospecting

• A flexible partnership, based on qualified contacts

In summary

Business referral in wealth management is a discreet but powerful system, as long as it is well framed. It allows both professionals and individuals to create value by connecting people who have a real need with experts who can meet it.

It’s based on trust, discipline, and clarity. And when everything is properly in place, everyone wins:
The client gets expert advice, the WMA grows their business, and the referrer capitalizes on their network.