Speech is a free-flowing, spontaneous medium. When you talk with clients, often you don't even think about what you're saying or how you're saying it—you just go with what pops up in your head, and what pops up is generally the phrases and talking points you've used in past conversations.
When it comes to referral requests, "what you've always said" might be hurting you more than helping you, especially in the current atmosphere. Here are three popular phrasings of requests from the "Leading Your Own Referral Revival " AdvisorFest webinar (free registration required) hosted by Bob David, including why you should think twice about using them:
- "I'm taking on a select number of clients this year." This is meant to project exclusivity, but it can come across as too advisor-centric. Also, it's a similar approach to that used by Bernie Madoff, telling investors that he's closed but that he'll make an exception just for them, fooling them into believing that he must work wonders to be so overwhelmed with clients. Do you really want to be taking cues from Madoff's playbook right now?
Try being more inclusive and sympathetic. Ask clients if they know anyone who is unhappy with their investments, and if so, if the three of them would like to get together for lunch.
- "I get paid two ways, one is referrals." There are many variations of this. If you're not careful, clients may resent you for being less than honest and upfront. Also, with many portfolios having taken large hits, investors are questioning the fees they pay their advisors, so bringing up the issue of payment may not be the greatest idea.
Instead, put the focus on giving. Offer to send your newsletter or articles to anyone your client knows, provided it's OK with them.
- "Who do you know that can benefit from my services—or is just like you—or who should I be talking to..." Too vague and broad. Most likely to get a deer-in-the headlights response.
In our research and experience, the more specific you get when asking clients about people you could help, the better. Mention specific examples of the kinds of clients you work with (like entrepreneurs, pre-retirees, etc.) and the specific issues you have expertise in (business succession, IRA rollovers, etc.).