The Client Experience Matters

mints on the pillowby George Ray

“The financial planning experience is a combination of a dental exam, math class, and marriage therapy” according to Dr. David Lazenby, speaking at a recent FPA Retreat conference. No wonder advisers have difficulty attracting new clients and getting referrals.  What couple wants to go through that kind of experience – annually? And, why would you recommend it to your friends or family?

There is no doubt that we could must improve not only the delivery of our services, but more importantly the perception of value and the client experience.  These days we are no longer competing solely with other financial advisers or advisory firms, but with companies like Amazon, Zappos, Nordstrom, and Apple. Companies who have learned how to provide their customers with memorable (even ‘remark-able’) client experiences whenever an interaction takes place. Companies who our clients love and wish we could emulate with the experiences that we provide.

Investment Advisor Nov 2013I just finished reading Michael Kitces’ article titled ‘What if Financial Planning Was More Like Build-A-Bear?’ in the November 2013 edition of Investment Advisor magazine (you should also be following his Nerd’s Eye View blog). If you have children, and have a Build-A-Bear store in a mall near you, the experience is probably familiar (my daughter had her 9th birthday party at one with her friends). As Michael describes in his article, the company takes ‘a product long since commoditized’ (teddy bears) and turns the process from ‘a few minutes at a cash register or website into a multi-hour interactive experience’ for you and your child. The child has a ‘much deeper buy-in’ because he or she is building a ‘new friend’, and Mom and Dad end up spending twice as much money to get the ‘same commoditized product’ (Yes, this is true, Michael).

Wait a minute. Did you get that? Let me say those two phrases again – ‘much deeper buy-in’ from the client and ‘willing to pay twice as much’. What adviser doesn’t want clients who are fully ‘bought-in’ to him and his firm, and willing to pay more for the client experience he provides — if indeed there is superior value?

So, what could we do to enhance the client experience? The Investment Advisor article suggests that changing the experience to be more interactive for the clients will create stronger relationships which will lead to more referrals. People need help with basics like organization, so we could assist them by sorting through their statements and prospectuses to help them decide what to keep and what to discard (although I’ve seen few advisers who are willing to do this), but we could go even further.

I’ve always told advisers that there is a big difference between data and information. That difference is primarily one of perspective – who’s looking at it. Data is raw. It may be organized, but it’s still just data. Until it is converted into relevant and useful information for the user (by placing into the proper context), it offers little value. As an example, advisers will often simply take a report from a money manager or fund company and pass it along to their client. In most cases the report was written for the adviser (not for the client) and has very little value to the client.  The fund company may have taken data and converted it to useful information for THEIR client (i.e., the adviser), but now the adviser must take what is data (from his client’s perspective) and turn it into useful information for HIS client.  This is where value is derived.

Mr. Kitces also says that delivering a financial plan to a client as a ‘giant tome, even though we collectively acknowledge that virtually no one reads them’ is not an ideal experience for the client either. Ideally, showing the client the results and recommendations through a live presentation using interactive software may be much more effective. The good news is that more and more advisers are starting to use iPads and large flat screens in their conference rooms to attempt to provide a more graphical and flexible solution for client discussions. The bad news is that we are still in need of more improvements to financial planning software before it becomes easy for most advisers to use it to interactively deliver that great client experience. As I mentioned above, financial planning software typically takes client data and uses it to prepare useful information for the adviser, but software companies need to work harder to help the adviser translate and organize the client’s data back into useful and relevant information for the client. (Companies like Dr. Lazenby’s ScenarioNow and firms like eMoney appear to be working toward this goal.)

I also love Michael’s suggestion to use mind maps to illustrate a client’s situation. I’ve frequently used mind mapping and electronic tools like Mindjet’s Mind Manager software to map out difficult concepts that I’m trying to understand. John Bowen of CEG Worldwide (and his co-authors Patricia Abram and Jonathan Powell) do a nice job of showing how mind mapping could be used to create a ’Total Client Profile’ in his book ‘Breaking Through – Building a World-Class Wealth Management Business’ (page 53). Imagine if the map could be interactive – allowing the adviser and his client to navigate through it during their planning meeting — and make changes, and see the consequences, as they review it.

And something else that I believe needs to be incorporated into the client experience is the use of data visualization.  We see these types of graphics used often to organize and summarize big data into visual information that can be more easily digested. I believe that it will become easier for financial advisers to produce this style of visual graphics that will be useful in client meetings. You can see examples at

Michael says ‘People will pay a lot more to an experience-based business that charges them for the feelings they get from engaging than they will to a business that sells stuff or charges for services rendered.’ I agree. Please read the valuable insights he offers in his Investment Advisor article, and look for ways that you can improve the client experience for your clients today.  Ask your financial planning software provider to incorporate more interactive tools and features into their software.  Watch for new tools coming from companies outside of our industry and consider how they could be used to improve the client experience. It matters.


No Dinner for You

Dinner has endedby George Ray

I like real life case studies. Let me share one with you.

Last week I spoke to 134 Federal employees in Wichita, KS in a large auditorium at Wichita State University. A financial adviser from Kansas worked closely with the Wichita Federal Executive Association (WFEA) to bring this together. The program consisted of an employee benefits briefing for Civil Service Retirement System (CSRS) employees in the morning, and a program for Federal Employees Retirement System (FERS) employees in the afternoon. Many employees brought their spouses along with them, and drove up to three hours from locations around the state in order to attend. (And, to their credit, none grumbled about the government shutdown.)

When I talk with financial advisers about the opportunities to help Federal employees, I often recommend that hosting an employee benefits program similar to this one offers an ideal occasion to meet people who need their help. The association in this particular area only hosts these programs every two years.  During that time there is a large vacuum of questions that builds and is looking for escape.  We were able to help release that vacuum with the information that we provided.

The comments we received on our evaluation form from the attendees were very favorable, but many would have preferred more time to ask questions about their individual benefits and circumstances.  Those who had additional questions added their contact information to the evaluation form, and about one third of them want to meet with the adviser in the coming weeks (and possibly many more in the future, as he builds his presence in this market).

I continue to see advisers who try to attract new clients with expensive evening dinners at a nice restaurant (Maggiano’s and Ruth’s Chris are particular favorites) and a general program on financial planning or estate planning.  These agendas are a ‘dime a dozen’ and require large expensive mailings to attract fewer than 20 people.  The message is usually designed to scare the attendees into meeting with the adviser, and can be heavy on the sales pitch.  Advisers are typically disappointed with the results, but continue to offer these programs because of the lack of a better idea.  They could take a lesson from this adviser who

  • Has decided on a niche market for his practice (working with employees of the nation’s largest employer).
  • Worked with an organization to host the program and invite their members, (in this case, the WFEA) rather than blindly sending mass mailings.
  • Didn’t need to buy anyone dinner at a nice restaurant to motivate them to attend (we provided communications materials to the organization’s members to explain the benefits of attending).
  • Contracted with a firm that has developed and successfully presented these types of programs regularly, and specifically for his market (my company).
  • Wasn’t afraid to bring in an outside expert to professionally present the information (I believe that was me).
  • Provided useful, relevant, and objective information which was designed to really help the attendees, rather than to mislead or scare them.
  • Offered to follow up with only those who actually requested his help.

As a result of his efforts, it wasn’t necessary for this adviser to spend thousands of dollars on mass mailing of invitations. In fact, he may actually RECEIVE invitations to present similar programs from the Federal agencies whose employees couldn’t attend (after hearing about the program from their colleagues). This case study is an excellent example of a successful niche marketing program.

Do you want to attract someone to your seminar? First, decide exactly who you want to attend. Then, develop a program that is unique and targeted to that particular audience. And, enlist the help of an interested organization who may also benefit by helping you to sponsor or host the program. Maybe it’s time to finally stop those boring, cookie-cutter financial planning dinners and try something new. Sorry, Maggiano’s.



by George Ray

In my last post we talked about building a positioning statement using as three-step approach (go here if you missed it) that starts a conversation with a potential prospect.  When suggesting that financial advisers use this approach, I often get two big questions that are valid, and should be addressed.  The first question deals with why I recommend the three-step approach specifically for financial advisers, and the second question is concerned with the fear of closing off the conversation by offering only one specific problem that you can solve.  Let’s take a look at each of these questions.

Question One: An adviser said, “George, why should I say to someone ‘You know how most people have this problem? Well, what I do to solve it is this.  And, the reason I do that is because they will feel like this after I’ve helped them.’ That seems like an awfully long and hard way to answer the question ‘So, what do you do?’. Why couldn’t I just say that I’m a financial adviser, a financial planner, or a wealth manager?”

You’re assuming that most people know what a financial adviser or financial planner really is, and what he actually does.  But, get 20 financial advisers together in a room and ask them about the services that they provide to their clients.  Ask them to describe their businesses.  You’ll likely get twenty different answers.  So, if we can’t agree on what we do and how we do it, why would we expect anyone else to understand our jobs?  That’s why describing a problem, the solution to the problem, and the emotion that results can be an ideal solution.  It focuses the discussion where you want it to go, and helps to explain what you do as an adviser (not what all other advisers do). However, this method really works best when you have a job that isn’t well understood (like a financial planner), or may have a lot of variation to it  (like a financial planner).  It doesn’t work so well for a person who has a job that we know well.  Here’s an example that shows how silly this could be:

Me: So, what do you do?

Guy: Well, you know how when people’s houses catch on fire they need to put it out?

Me: Yes?!

Guy: Well, what I do is drive up in a big red truck with a hose and a ladder and put it out.

Me: Oh?!

Guy: Because when I do people feel much safer and happier.

Me: So, you’re a fireman??

Guy: Yes.

Me: Jeez, why didn’t you just say that? I know what a fireman is. Do you think I’m a moron?

This is a ridiculous conversation.  We have a  pretty good idea of the fireman’s job, so this really isn’t necessary.  Yes, he could have just told me that he was a fireman. But when the job and its duties aren’t as clear (or if you want to clarify them), then the three-step method can help you do that.

Question Two: “George, I don’t like this method because I may introduce a problem that I can solve, but what if the person that I’m talking to doesn’t actually have that problem? Isn’t that the end of the conversation?”. For example:

Guy: So, what do you do?

Me: ‘You know how most small business owners are so busy running their company that they have little time to spend managing their investments?

Guy: ‘Gee, no I don’t. I’m not a small business owner.’

That’s OK, it isn’t end of the conversation. It would have been better to ask ‘So, what do you do?’ to him first, which would help you to decide which problem that you want to tell him that you solve, but In this situation, one of three scenarios is likely to follow:

1.     Firstly, he may disqualify himself for you. OK, so he isn’t a small business owner, and that’s you’re target market, so you’ve just eliminated him as a prospect.  Keep talking if you like — you can relax and have an interesting conversation about another subject that isn’t all about you. Or, if you’re really on a mission to find new business, then move on to someone else.

2.     Secondly, he may ask you for an exception.  “I’m not a small business owner, but I could really use some help with my rather large investment portfolio.  Would you be willing to help me?” Since he doesn’t fit your target, it’s your call on whether you want to make an exception. “Well, I usually just work with business owners, but when you say large, exactly how large is it?”

3.     And lastly, he may offer you a substitute.  “I’m not a small business owner, but my uncle is.  You should really talk to him.” Ask him why, and if he’ll also introduce the two of you.

So, don’t be afraid to build your positioning statement by using this three-step method, and use it consistently when you meet someone who asks ‘So, what do you do?’  You’ll have a better opportunity to explain what it is that you actually do, and how you help people.  Even if it doesn’t land you a new prospect with the guy or gal you’re talking to, you may find that it will still lead you to new business.

Position Yourself for Success

chess positioning

by George Ray

Have you ever had an opportunity to introduce yourself to a potential client (maybe the big one that you’ve been waiting for years to land)  — and blown it?

I’ve talked previously about the importance of having a value proposition that resonates with your customer segments. But before you even have the chance to explain all the value that you could offer this potential client in your new relationship, you must position yourself to have a meaningful conversation with him.  Your positioning statement (the modern version of the old elevator speech) is essential.  Without one, you may never get to the point of being able to show your value.

In workshops that I’ve conducted with advisers on this subject, its unfortunate how many advisers believe that they have a great positioning statement, but don’t.  In reality, most are poorly formed and/or poorly executed. I even had one adviser, during a role play, begin by asking how much money I make.  When I told him that he doesn’t have the right to ask that question to someone he’d just met, he was flummoxed. (I’ve always wanted to use that word in a blog post.)

Poor positioning statements are filled with jargon like “I’m a fiduciary” (What’s that? Sounds boring. I’ve got to go now.) or contain irrelevant information like “I have a Series 7 and Series 63”.  (Who cares? Can you help me figure out how much I need to retire?). Poor positioning statements are dangerous – they can kill the start of almost any conversation.

I’ve heard lots of excuses reasons that an adviser can’t (or won’t) build a solid positioning statement. They say ‘George, you just can’t condense how great I am and all that I do into 30 seconds.’  (I say watch any Apple commercial on TV.  They know how to do it.) I’ve also heard ‘I don’t want to sound canned or phony with a rehearsed elevator speech.” (When well-rehearsed, you will sound natural.  Think about actors in a play.  They know their lines and how best to deliver them BECAUSE they are well-rehearsed.) Another version of this is ‘I may need different versions depending upon who I’m talking to, so I just play it by ear.’ (The best jazz musicians can ‘play it by ear’ because they have mastered the melody, chords, and rhythm of a song.  That allows them to easily improvise. You need to master your basic positioning statement before you’re good enough to start improving.)

The real problem, which needs to be tackled first, leads us back to the value proposition.  A great positioning statement forces advisers to identify and articulate their value.  You must first have a clear value proposition.  That’s hard.  It takes work. It requires knowing who your customers are and what they want (which could lead us into a discussion on another adviser challenge – creating an ideal client profile.)

So, what’s the solution? Firstly, understand that your positioning statement and value proposition are very different.  The positioning statement has only one purpose — to open up a conversation with someone you’ve just met who at some point likely says ‘So, what do you do?’  How you answer that question will determine whether he will permit you to continue.  You’ve only got about 8 seconds to get his interest (i.e., the attention span of the average adult) and you should probably know that there is a woman in a slinky red dress at the bar that he can see behind you over your shoulder – so you may only have about 4 seconds.

The best way I’ve found to create an effective positioning statement is by combining these three building blocks. If done correctly, you will accomplish your goal of opening a conversation with someone. (After that, it’s up to you where you want to take it.)  To start . .

1. Provide an example of a problem that most of your clients encounter. You can do this (after the ‘So, what do you do?) by starting with “You know how . . . “ and then use an example of a problem that you can solve. For example, ‘you know how people have trouble saving money for retirement’ or ‘you know how people can’t figure out how much they’ll need to send their kids to college’. More common and broader problems can be used when you don’t know much about who you’re talking to, but if you’re at a cocktail party with a roomful of executives from Big Local Company, Inc. then improvise (you well-rehearsed jazzman, you) by saying ‘you know how executives with stock option plans can’t decide when they should exercise their options’. (As the stock option-rich executive shakes his head and says ‘Yes, I certainly do’.)   And, then . .

2. Explain how you solve that problem. You can do this by starting with ‘Well, what I do is . . . ‘ and then tell him exactly what you do to help someone with that problem.  So, let’s carry through our last example — ‘You know how executives with stock option plans can’t decide when they should exercise their options?’ “Why, yes, I certainly do because I have that problem.” ‘Well, what I do is create customized models for my clients that illustrate all of the possible scenarios to give us the best information to make a decision on when to execute those options.’ “Wow. That’s exactly what I need. Are you accepting new clients?” Isn’t that a much better positioning statement? It got you into a meaningful conversation (and he also lost track of the slinky red dress). But you can’t stop there. Next . .

3. Tell him why this is important to him. Don’t just tell him that you can solve the problem. You must finish with emotion. Finish with the feeling that he will get when you have solved the problem for him. Tell him WHY you do what you do.  “I do this BECAUSE making these important decisions on how best to exercise stock options relieves my clients of the stress of having too many of their eggs in one basket, and often we can even find a little extra for them to treat their family to a great vacation”. “Where have you been all my life? Please help me. I want to feel like that too.”

I’ve found that using these three building blocks can be the most effective way to create a positioning statement that will open conversations.  Here, let’s see if it works.  You know how financial advisers often have trouble introducing themselves to new potential clients? Well, what I do is provide them with the building blocks to build an effective positioning statement. Because when I do, they’re able to gain many new clients and build a more successful practice by simply knowing how to effectively answer the question ‘So, what do you do?

What Gets Referrals? It’s Not Always Obvious.

I love this article by Katherine Vessenes of Vestment Advisors titled “What Gets Referrals? Exceptional Service” recently published at ThinkAdvisor. The article is full of excellent ideas that her firm has implemented to gain more referrals. But, what I really liked is that right up front she says “Our system of getting referrals from our existing clients is counter-intuitive. We don’t ask for referrals at all. We just provide awesome service—it has worked great for us.” Katherine mentions that her firm does things for her clients that “are obvious to the client and things that are not so obvious”.

Although she divided them up a bit differently (‘obvious vs. ‘not so obvious’) than I did in my recent post (You Can Get Referrals. Just Don’t Ask for Them.), I think you’ll agree that it’s important to help clients understand what it is that you do for them (exactly), how and why you do it better than anyone else, and how it is helping them to reach their goals.  This should be obvious.  Although sometimes it’s obvious to us, but not as obvious to our clients – which is why it may take some extra effort.

I believe that the ‘not so obvious’ tasks (she calls them ‘covert’) need to be made more obvious to the client if we are to get credit for them.  In fact, making those task more obvious might even make them ‘remarkable’ for the client. Here’s an example —

Katherine’s first suggestion is ‘Make things easy’ for your client. It’s a great idea. The father-in-law in her example had already made the suggestion to move a 403(b) plan to an IRA. She agreed and offered to help. It’s interesting that what she did was actually ‘remarkable’ to the client, although it seemed ‘obvious’ to her. The reason it was actually remarkable to the client was because it was previously hard (i.e., Dad told son-in-law what to do, but never followed through to help). When she got everyone together on the phone and made the transfer happen for the client, it created a remarkable experience for the client (she made it very easy with a simple phone call).  I can just hear this client at a dinner party say to someone “Well, yes, my father-in-law is a financial adviser, but (although my wife won’t like me to say this) I would recommend Katherine. She’s made everything so easy for us and provides outstanding personal service.  She just picks up the phone and makes magic happen.”

I’d suggest looking at each of her ideas and consider what she did that helped the client understand the benefits of working with her and her firm, and consider when she also did something that the client felt was remarkable.  Then, decide which of her suggestions you can put into place in your own practice. As always, share your thoughts in the comments.

You Can Get Referrals. Just Don’t Ask for Them.

Duct-tape-over-mouthIn my previous blog post (Referrals? Don’t Bother Asking.), I suggested that most clients don’t feel the need to provide you with referrals because referrals are social currency, and your client has already compensated you (with fees, commissions, or both) for the work you did for him.  Unless he feels the need to increase his social status in your eyes, he has little incentive to provide you with referrals.  And, it’s likely that any referral you would get (as a result of asking) may not be ready to work with you right now.  Have you ever called a referral only to find that he isn’t actually ready to solve a problem that he may have (or may not even have a pressing problem at all)?  Who needs referrals who aren’t ready to do business?

In that post, I recommended that you must do two things to get referrals.  First, make certain that your client can easily talk about what you do and how you’ve helped him, so that when a situation does present itself, you’ll come to the top of the list as a solution. And, also give him something so remarkable to talk about that he will spontaneously combust if he doesn’t tell everyone what you did for him (so that he creates the situation himself, rather than waiting for it to happen).

      Before we continue, I’m also going to tell you that asking for referrals creates a negative experience for the client. No matter how much goodwill you created with the work you’ve done to help him, you just lost some of that goodwill by putting pressure on the client to provide you with a name of a friend, relative, or associate (out of the blue) before the end of your meeting. What you’ve done is made a withdrawal from your client’s emotional bank account. Do that every time you meet with him and you may end up with a negative balance in the account.

      So, how can you show your client how you are helping him?  There are many ways to do this, but here are two suggestions:

  • Open every review meeting with a list of specific issues that the client has asked you to help him solve.  And close every review meeting by summarizing those issues, explain exactly how you’re helping him to solve each one, and provide him with the current status.  These issues (i.e., goals) should be SMART – Specific, Measurable, Attainable, Relevant, and Time-bound. (Read more about SMART goals here.)  The less ‘SMART’ they are, the less likely that he will be able to talk about them when provided the opportunity. If you’re only helping him with ‘financial planning’, he won’t know how to explain what you’ve done for him to someone that he meets.  But, if he knows how much he’s going to need to send his kid to college and that he’s 50% there (and his son is currently in 3rd grade) — that’s something he can explain (by the way, that’s also pretty remarkable as well).
  • Keep your client focused on the results you are obtaining for him, not on the strategies or products that you are using.  He shouldn’t be telling anyone that he just bought a mutual fund or an annuity from you (especially if he doesn’t know why he did that).  He shouldn’t be talking about the features and benefits of the fund or annuity. Instead, he must be able to say ‘My adviser is doing a great job helping me to build a fund for my kid to go college.’  And, he must be able to offer specifics on just how you did this.  (“He found college cost projections for three schools we would like our son to attend, then showed us the amount we will need to save, helped us find money in our budget, and also opened an account for us to begin saving.”)

Your client will be overjoyed to talk about you without even being asked if he has something interesting, surprising, or unusual to say about you or something you did for him – something ‘remarkable’.  You had your assistant send him a birthday card – no, not remarkable in the least. Every adviser does this (we learn it on the first day of adviser camp). Called him on his birthday.  Better, but no.  Took him to lunch. Getting warmer. Sent him a sleeve of his favorite golf balls.  Better still (at least you knew which ones to send). Sent him an autographed note from his favorite golfer. Now we’re talking. But what if you were able to conference in his favorite pro golfer on the phone with you and him? No way! “I’ve gotta tell you what my financial adviser did on my birthday three years ago. You won’t believe what a great guy he is.” Remarkable? Yes, jackpot (He’s actually still talking about it three years later)!  Was it easy to do? Probably not.That’s likely what made it remarkable. By the way, you don’t need a special occasion for this (like his birthday).  Something can be even more remarkable when it’s done for seemingly no reason.

So ‘remark-able’ is surprising, unusual, out-of-the-ordinary, unexpected. It should be positive.  It should be personal – the more personal, the better. It will likely take some effort. Or at least it must look that way. When ‘remarkable’ occurs, we want to tell others about it as John Jantsch does with this story excerpted from his book ‘The Referral Engine’:

“One day my wife and I hit a sale at the outdoor gear retailer REI. During the trip she found a coat that she loved and bought it. A few weeks later, we went to an outdoor event and she took the opportunity to wear her new coat. As we went out the door she reached into the pocket and found a little slip of paper.

She pulled the slip out fully expecting something along the lines of “Inspected by #48.” Instead, the note read “You are a goddess!” That simple, unexpected message made her day. Of course, we both wondered, who made this coat? I checked the manufacturer’s Web site and discovered a very cool little garment company called Isis (www.isisfor, located in Burlington, Vermont.

This creative act, unrelated to the quality, cut, or color of the coat in question, compelled us both to think fondly of this company and voluntarily refer them to anyone who would listen. Something I’m doing right now.”

So, how do you help your client understand how you’re helping him, so that he can easily explain why someone should talk to you about a similar problem? What have you done that was so remarkable that your client wants to tell anyone who would listen? Share your thoughts with us in the comments.

Referrals? Don’t Bother Asking.

by George Ray

I just finished reading another article on how financial advisers should be asking for referrals. This one titled “Getting Referrals Your Own Way” by Ellen Uzelac appeared in Investment Advisor magazine ( on the web) in the August issue. It says that 90% of advisers don’t ask for referrals – even after firms host sweepstakes, offering luxury vacations.  These articles appear in the financial services magazines regularly. In fact, a quick Google search of the thinkadvisor website using the word ‘referrals’ produced 874 results – just from one financial advisor publication.

The article mentions Invesco’s new “Preferral’ program which begins ‘with a line that says something like this: “You have probably noticed that I don’t often ask you for introductions. That’s because I never want to make you feel uncomfortable, or seem like I am more concerned with my business than your family’s financial well-being.”

I can just imagine the client thinking: So why are you bothering me with this now? Just because you’ve never asked before doesn’t make it OK now. Just leave me alone. Are we done? Can I go now?

The article goes on to suggest that making the referral request more ‘personal’ by making an ‘appeal that emphasizes an individual advisor’s genuine thoughts, feelings and concerns’ is supposed to make this work.  Really?

20th Referral ImageLook, everyone has their own take on what works in terms of getting more referrals, better referrals, etc. There are referral coaches and lots of books about the subject.  But I truly believe that asking for referrals is not the answer.  In fact, if you have to ask, you won’t be getting anything that’s actually worth something.  And the more you ask for them, the less each one will be worth.  I heard a speaker once say that he could guarantee that his method would get you twenty referrals every time you asked for them.  So, how much do think the twentieth referral would be worth?

Let’s get something straight. You must understand that your client has no obligation to make a referral to you. Yes, even if you tell him that it’s one of the ways that you get compensated. (Most clients have heard that one, and are saying to themselves “No, I already did compensate you for the work you did for me.”)

Secondly, you should know that referrals are a form of social currency. If I make a referral, I’m making it to raise my status with whomever I am giving that referral to.  I’m essentially saying, “I know just the person that can help you with your problem. I’ve already vetted them for you.  I feel very comfortable telling you about them because I know that it won’t come back to haunt me. I’m secure in the fact that they will do a great job and you will come back with your problem solved, a big grin on your face, and a huge thank you for me. And, as a result, I know that to you I will now be a more valuable friend, associate, relative, etc.”

So, the client doesn’t receive an increase in social status by giving you a referral, Mr. Adviser.  Remember, you work for him.  And, he’s paying you.  In his mind, he’s already above you. Yes, you are his financial adviser, but essentially you are his employee — like his gardener, or his plumber.

Now, he may well refer his gardener or his plumber to someone in need of those services.  If he does, it’s for two reasons.  Firstly, he can say exactly what services are performed by this person. “I had a leaky faucet in the bathroom. This guy came and fixed it in five minutes, only charged me half of his regular rate, since it wasn’t a big job, and he was on time and put little booties on over his shoes when he came in the front door.”

Secondly, in order to get referrals, your clients need to be able to easily ‘remark’ about you to their friends and associates.  In order to get them to ‘remark’, you must make yourself ‘remark-able’.  The plumber did several things that made him stand out (i.e., ‘remarkable’) from other plumbers – only charging half his regular rate, being on time, and keeping the house clean by putting on his booties.

So, your client must know exactly how you have helped them, and your services must be outstanding compared to the ‘typical’ financial adviser.  If you satisfy both of these criteria, you’ll get referrals –without even asking.  But I believe that most advisers do a poor job at satisfying either one of these criteria – which is why they must attempt to beg ask for referrals (which, by the way, lowers their own social status in their client’s eyes every time they ask).

How can you make sure that your clients understand exactly what you do and how it has helped them? How can you make your services ‘remarkable’ enough to make your clients want to talk about you? Let’s discuss this in a future post.