In the 2017 benchmarking survey of financial advisors and follow-up paper entitled What Makes an Advisor Referable, authors Julie Littlechild and Stephen Wershing listed 9 correlated activities of “highly referable” advisors. We all know that referrals are the most powerful, most effective and most cost efficient way of obtaining new clients, but most advisors don’t focus on the right activities to grow their businesses. Referral growth starts with a strategy, not simple tactics. One of the strategies dawned on me a few weeks ago as I was discussing a somewhat big purchase with a small group of friends.More referable

As an aside, I am not an extravagant person. I can still remember my grandparents talking about saving, not spending more that you earn, and the values of being frugal. Their experience was in the Great Depression and it weighed on their financial decisions. I have always saved and invested and lived below my means.

So as I was talking to my friends about the purchase, I didn’t talk about it in the context of my advisor or financial plan. I used a word to describe why it was ok to buy it: Confidence. I had confidence that it was ok to splurge. The word confidence popped up as a descriptor of how I felt – and I began to think of my financial plan (and planner) in that light. In other words, my advisor wasn’t present for the conversation, but my advisor was there.

As I reflected on the conversation, I thought about the 9 steps from the paper, and #6 in particular: Involve your clients in the experience.

Engaged clients = referrals

Looking at the research on the 512 firms from the paper:

  • 68% of highly referable advisors involved their clients in setting a review meeting agenda
  • 57% communicate each of the steps they walk through with clients (including timelines) when onboarding a new client
  • 48% tell their clients how they would like to be introduced to the people they refer

These firms know that engaging clients in the experience increases their referability. The firms draw clients into the process and empower them to make decisions about their relationship with their advisor and the more engaged the client, the more referrals.

The challenge, of course, is to tell your clients how you would like to be introduced. It can be a difficult and somewhat uncomfortable conversation. Personally, I think that may be one of the reasons the number (48%) is smaller than the others. If we know it is important, how can we do a better job? Instead of having a direct conversation, maybe you can make it a part of your ongoing meeting process.

Use your words

At your next staff meeting, or when you are meeting with your study group, COIs or key stakeholders, come up with the word or phrase that you want your clients to use when they talk about planning or their financial advisor. Make that word or phrase part of every meeting you have with your clients. Think about how to use it at the end of a conversation. Maybe something like this:

  • After our meeting today, how confident are you in your financial plan?
  • After our meeting today, how confident are you that you will have enough in retirement?
  • After our meeting today, how confident are you in your estate plan and that things will go as you wish?

It won’t happen right away, but instilling a word or phrase into your conversations can help in describing you in the way that you want to be described.

Let’s be honest, when your clients are out on a Saturday night with friends, “Who is your financial advisor?” does not come up often – if at all.  They are talking about their kids and how expensive college is (or will be), or about buying a second home, or their retirement, etc.  Clients who are engaged in the process will offer up ways to help their friends, if you give them a word or two that describe what you do, it will make it even better. How confident are you that they will say the right thing?

Legal Note

Julie Littlechild and Stephen Wershing are not affiliated with SEI or its subsidiaries. They survey gathered input from 512 firms across the country, via online survey between March 15 and April 1, 2017. The margin of error is estimated at +/- 4.3%.


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