9 Tips for Referral Success In a Choppy Market

A sales manager in Canada called today looking for help talking to his advisors about asking for referrals in a volatile market.

Here is a key rule to remember at times like this: look around you, see what everyone else is doing, and then DON'T do that.

During choppy markets, most advisors have their heads stuck firmly into the sand.  They're hiding. But this is no time to hide. This is the time to INCREASE your visibility and show your clients just how great you really are.

1. First and foremost, make sure YOU are calm.  Reacquaint yourself with what you really believe and what your real value is.  This is a great time to get clear about what you actually do to help clients,  what is special and unique about you, and why a client working with you and your firm is better off in this market than a client working with another advisor, or going it alone.

2. Take proper care of your clients.  Your best referral strategy in a volatile market is to make your existing clients feel cared for and special.  They may not even be feeling especially concerned about the market, but you will make a big impression when they get that call from you saying "I thought you might have some questions or concerns about your portfolio and I wanted to call and put your mind at ease."

Again, remember, most advisors will NOT be proactive in a difficult market.  The referrals will come naturally if you show your clients you care enough and are confident enough to get out in front of the problem.  Just think about how you feel when you can't get a wholesaler to return your calls when his funds are tanking—and how much you appreciate those wholesalers who not only take your call, but who reach out to you proactively when there are performance issues, even if you don't have a ton of money in their funds.  So reach out and call every single client. Even the smaller ones. Even the ones whose portfolios are in the toilet.

3. Be ready to answer clients' questions in as much detail as possible. Be prepared to offer them specific comfort—not platitudes about how the market always goes up again, but details about how THEY are protected from disaster and why THEIR financial future is not crumbling before their eyes.  Put what they're seeing on the news into perspective based on their specific investments and your particular investment approach. 

4. Be a good listener. Sometimes clients just need to vent. This may be their life savings, after all.  Don't be defensive. But once they've vented, be prepared to explain to them how they are protected from the volatility, and focus on the ways that YOUR advice and counsel are contributing to helping safeguard their financial lives.

5. Watch and listen for referral opportunities.  In this environment, clients may mention family members or friends who are having problems, feeling scared, or being neglected by their current advisors. They may mention people they know who have been do-it-yourselfers but are now rethinking that approach, or who are otherwise unhappy with their investment situation.   

Be prepared to jump on those opportunities when they arise by talking about how you might be able to help those people.  "I can understand that your friend is frustrated and nervous that she can't reach her advisor.  If you think it might help, as a favor to you, I would be happy to sit down with her, take a look at her portfolio, and give her my perspective." 

6. Remember YOUR unique value proposition. If you happen to specialize in defensive investing or have special value to offer in a volatile market, be ready to mention that.  And even if you don't, remember that in your client's eyes, YOU are the expert. You have knowledge that you can share.  Offer to share it.  "Wow, it sounds like your mother is feeling very worried.  Would you like to bring her in to chat, and perhaps I can help put her mind at ease?" 

7. Listen for referral cues. During volatile markets, you're likely to hear compliments and recognition of your value from some of your clients.  You can probably guess which clients those will be—they're the ones whose portfolios are doing well, so they're likely to be feeling happy and grateful when you call them to discuss market conditions.  If a client does rave about how well his portfolio is holding up or what a great job you've done protecting her from volatility, be ready to leverage that compliment, because there's no better time to ask for an introduction or referral.  Learn to recognize praise and gratitude as a referral opportunity. 

8. If you have a newsletter or firm literature that offers valuable insights into what's happening in the market right now, you can offer to send it to people your clients know.  To add some urgency, you can mention that you're preparing a mailing right now because you want to get the word out to your existing clients quickly, to allay their concerns, and if they know anyone they think would find the information helpful, you'd be happy to include them in the mailing.

9. Continue using the same network mapping and targeted introduction strategy you've hopefully been using (the one you learned from Automatic Referrals), but in this environment, try to focus your efforts especially on clients who:

• are happy with how their portfolios are doing
• seem to have performance in good perspective
• have made it clear they value you for more than just their performance

Remember, change and uncertainty can be huge drivers of opportunity, as long as you're prepared to harness them.  Referrals happen because your clients recognize your value.  And there is no better time to prove your value than a choppy market!