Only Fools Rush Into Referral Accounts
Having a referral throw a new account into your lap is hardly ever a bad thing, but jumping into a new relationship helter-skelter can lead to unnecessary problems. Plus, you could miss valuable opportunities for additional referrals.
Jim W., a Canadian advisor, wanted advice on how to handle such a spontaneous, new account. A woman who had been referred to him moved over $250,000 to him, citing the fact that he came “highly recommended” as her reason, and left without so much as bringing up the topic of investments. Additionally, she mentioned that her husband might want to bring his assets over, too, but that he would need convincing.
Wanting to leverage this new client and potential advocate,
Jim asked
The first thing Jim should be doing, Bob suggests, is to do some digging into what exactly brought the referral into his office. “It’s vital here to get a much better understanding as to why you came so highly recommended in the first place and by whom,” says Bob. “This gives the context which in turn allows you to get client-centric, do some detective work, and create a network map that will lead to the right introductions.”
This understanding of the new client’s motivations is vital, as knowing the problems they came to you to solve will let you offer to help any of their friends in similar situations. In Jim’s case, that includes the husband as well as other potential referrals.
Bob additionally cautioned Jim to slow things down with his new client. When things get rushed, the chance of miscommunication increases and mistakes can be made to tarnish the new relationship. Bob recommends saying something akin to the following:
"I can appreciate the value of your time and that you are in a hurry—my time is valuable also. But you've worked hard to accumulate this money, and I want to do make certain we do what's best. I find it’s mutually beneficial when we take the time in the beginning to be thorough in our planning, so what I suggest is setting a time to come in and do this right....does that sound like a reasonable approach?"
Part of the beauty of referrals is that prospects come to you already confident of your abilities and in most cases pre-qualified. But just because a referred prospect is an easier client to take on, doesn’t mean you should race into the relationship. Doing so could damage the relationship and cut-off the possibility of gaining even more referrals.
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