Are You Referrable?

Jack spent the last 45 minutes of his day watching someone from his home office around citing firm research that showed that 90 percent of the firm's clients would be happy to provide referrals if their advisors would only ask.

Jack spent the last 45 minutes of his day watching someone from his home office “strut” around citing “firm research” that showed that 90 percent of the firm's clients would be happy to provide referrals — if their advisors would only ask.

Jack was frustrated by his colleague's poor performance for a number of reasons. First, it was never that easy. Whenever he asked for referrals, he would get a favorable response but rarely received an actual referral. Second, and largely because of the first reason, he didn't consistently ask for referrals. Third, he always felt like he was coming across as a salesman — and that he looked “weak” — whenever he got up the nerve to ask for one.

Here's the deal: Generating referrals remains one of the few truly effective ways to market your services to the affluent. Our research over the past seven years has consistently shown that three factors must be in force before you can gain access to your clients' centers-of-influence — and get those referrals you want. Your strategic partners, your clients and your clients' centers-of-influence must …

  1. Like you.

  2. Trust you (Trusting is not the same as liking: We all know people that we like but don't entirely trust.)

  3. Respect you as a professional who can answer their needs in today's world. (You must be a financial coordinator, able to untangle the many threads of a family's financial affairs.)

After we discussed this strategy with Jack, he concluded that he probably wasn't perceived as the “go-to” financial coordinator for his clients. He simply handled their investments. Although he believes that he performs his duties well, he has resisted his firm's initiatives for expanding into other financial areas, confessing, “I was never comfortable in those other areas; I don't have enough knowledge, and I don't always trust the motives of my firm.”

The challenge for many financial advisors is transforming themselves from one-dimensional investment advisors into multidimensional, solutions-based, go-to financial consultants. Today, you can't build a financial advisory practice that attracts, serves and develops loyal affluent clients by focusing on your investment acumen alone.

In basic terms, there are 10 things you need to make certain you do:

  1. Replace your annual production goals with a long-range business plan that covers all aspects of your financial practice and is supported by a tracking system that allows you to measure your weekly, quarterly and yearly progress.

  2. Select specific affluent market segments and then establish an ideal client profile that includes minimum investment guidelines for new clients.

  3. Develop a strategy to find advisors who can work with smaller clients whom you can no longer serve adequately.

  4. Expand your services. You must have a comprehensive wealth-management process that guides every client relationship. This includes things such as budgeting, cash-flow management, determining net worth, insurance, investments, education planning, tax planning, retirement and estate planning and charitable giving.

  5. Initiate a center-of-influence introduction and networking strategy that will enable you to penetrate your top client's centers-of-influence and connect with, qualify and close affluent prospects within your targeted affluent market segments.

  6. Either become a certified financial planner (CFP), have a designated team member get the CFP or have direct access to someone who has the CFP. Your clients must have a comprehensive financial plan, it must be up-to-date and it needs to be executed in a timely and systematic manner.

  7. Transition any remaining transactional clients to fees for the full range of services you are providing.

  8. Design a calendar of timely contacts with your affluent clients: monthly phone calls, quarterly reviews in person and complete 24/7 access in case of an emergency.

  9. Build a client-centric wealth- management team with strategic partners — virtual, local or in-house. Assign each individual a set of responsibilities that are geared either towards providing knowledge-based solutions or building affluent client loyalty.

  10. Maintain a good level of personal health, confidence and self-respect.

This list might seem daunting at first, but it can be implemented one step at a time, one client at a time and one new affluent referral at a time.

Writer's BIO: Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com

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