Have your client's ear

Portfolio adjustments can lead to referrals

Are you making portfolio adjustments in response to changing market conditions? They can help you attract more referrals.

Providing clients a timely bit of news can be a reason to talk about you.

Studies of referral behavior indicate that the most frequent reason clients provide referrals is because a friend explicitly asked for one. The second most common (and maybe the best) is because a friend described a need that they recognized their advisor could solve. But there’s another reason clients might talk about you.

Clients may mention to people something you provide them that is newsworthy. It might be that you got an award or public recognition. It may be because you made a contribution or undertook a project to support a cause they believe in. Or it could be because you adjusted their portfolio to respond to a risk or capitalize on an opportunity you see in the market.

One of the challenges advisors have in maintaining and building client loyalty is communicating the value you provide when the client is not sitting in front of you. You do a lot of work on their behalf behind the scenes. If it remains behind the scenes, you cannot get credit for it. Look for opportunities to let them know about it.

One theme that arises in client advisory boards is that following a disciplined investment process increases client confidence. When we ask clients what kinds of things they value about the services their advisor provides, a well-articulated process often makes an appearance.

General principles do not get mentioned. I don’t hear comments about finding the right allocation or hiring world-class money managers very often. But if there is a more concrete process, it comes up. If the advisor has made adjustments that demonstrate an adherence to that process, it makes an impression. At one advisory board meeting this fall, a participant commented “I was reassured to hear that you have a disciplined process but as we started working together I saw that you were actually sticking to it. That gave me confidence.”

The markets have been turbulent recently. If you make adjustments to portfolios in response, make sure your clients know about it. Discuss it in your newsletter or blog. Send out a blast email letting people know they may see changes.

When the state of the economy or the markets comes up in conversation, doing something, communicating something, that keeps you top of mind creates referral opportunities.


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