Is the Use of One of These Hackneyed Referral Requests Hurting You?

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.).

Why Educating is the Key to Bringing on Clients and Keeping the Ones You Have

There is a paradox in today’s investment world, especially when it comes to the wealthy. In order to overcome loses from last year and recover their nest eggs, many investors want to get aggressive and capitalize on the market recovery. However, these same investors are still afraid of being burned again by a market plunge and many of them have lost confidence in investment professionals to guide them through.

Educating is a great way to overcome the fear and distrust many are feeling, since understanding grants peace of mind. An effective way to keep your clients informed is by sending articles to them, encouraging them to pass them along to friends and family, which also makes it a good stepping stone to referrals.

Here are some important points to keep in mind should you decide to start an article sharing strategy:

• Find articles that reflect who you are and your investment philosophy. Remember that the goal here is to educate the client or their associates, giving them knowledge about why and how you do what you do so that they feel comfortable with you managing their assets.

• Write a note on the corner of the article. This could be something as simple as, “Saw this and thought you’d be interested,” to explaining to them how the article fits in with their own portfolio strategy. This adds a personal touch, making it more meaningful.

• Keep tally. For an article sending strategy to work, you need to keep at it, and the only way to ensure that is to track how often you’re sending them out. Plan out how many you want to send each month and stick to it.

• Alternate mediums. Email makes it easy for clients to forward articles along to their friends, but don’t rely just on sending articles electronically. Mix it up by sending the articles via fax or physical mail. 

• Encourage clients to share! This one’s important. Always include a line written somewhere on the article or in the email about sending the article on to anyone who could find it useful. This is what will get you referrals.

• Get writing. Authorship is a powerful credibility establisher and trust builder. If you can, write articles for local papers or trade magazines and then send reprints to your clients.

• Avoid mentioning products. Whatever you do, avoid having the articles you send read like a product advertisement. This makes clients and prospects see you as a salesman, and that’s the opposite of what you’re going for.

See these articles for more on using education and article sharing to improve client service and ramp up prospecting (free registration required):

The Rule of 7: How to Build Mindshare and Win More Clients
How often do you follow up with a prospect? Do you make one call and hope that it's enough? Two? Three? Four follow-ups? Is there a magic number of follow-ups that will increase your chances of sales success when prospecting? Yes. The magic number appears to be seven.

How to Land New Clients in a Bear Market
Here's how one advisor is using a four-pronged approach to communicate with clients in a way that naturally grows his business during a market crisis. If you view the current turmoil as a buying opportunity, you must also see it as a once-in-a-lifetime opportunity to add new clients. Embrace it or waste it. The decision is yours.

Keeping the Faith With Clients
Now more than ever, the trust you engender will make or break your career. Here's how to consolidate clients' trust and keep it by being a leader in turbulent times.