Five reasons five clients will send five referrals in 2021

Conversations to help advisors grow their business during lockdown

Five reasons five clients will send five referrals in 2021
Bryce Sanders

2020. Has there ever been a year where the end was more widely anticipated? As an advisor, you worked hard for your clients. You worked from home. You kept long hours. You kept in touch. You held hands. Clients either know it or need a gentle reminder. This can get referrals flowing. Your clients don’t even need to do much.

Five Reasons Why Five Clients Will Refer

You conduct annual review at the start of the year. Probably quarterly ones too. If you give clients something ton brag about, they will likely tell their friends. If it’s compelling enough, they will ask: “How can In get some of that?” The referral has been created.

In these examples we are assuming your client was invested in the stock market during 2020 and made money.

Reason #1: The annual portfolio review.

The action: You have scheduled annual reviews by video chat or over the phone with all your clients.  You review their financial plan, show their progress vs. goals and how their investments performed.  You rebalance and make your suggestions for new money.

The conversation: “Lets get our annual review on the calendar. It’s been a year like no other. I appreciate your following my advice. You deserve to get a report card, to see how it all worked out.”

Now your client can tell friends: “I can’t make our Zoom cocktail call this Friday. It’s time for my annual review and report card. My financial advisor feels if I follow his advice, he should be accountable for the results.”

Reason #2: Returns consistent with their risk tolerance level.

The action: When designing their portfolio, you used an asset allocation consistent with their stated risk tolerance level. You suggested investments consistent with their risk tolerance.  You kept in touch to rebalance the portfolio periodically.

The conversation: “2020 was a good year for the stock market. You did well, but here’s an important point to remember. You made money in 2020 without taking undue risk. It’s reckless when some people try making a bit more money by taking the risk you could lose it all.”

Now your client can say: ‘Yes, you are always telling me about how well you are doing in the stock market. How much risk did you take to get that return? Do you know? My advisor helped me make money consistent with a lower level of risk.”

Reason #3: Why they don’t obsess over the stock market.

The action: In addition to utilizing asset allocation, you recommend clients outsource day to day investment decisions to professional money managers. You have recommended separately managed accounts or mutual funds in style and size categories.

The conversation: “Part of the reason we did well in 2020 is because you agreed we should get professional money managers working on your behalf.  It takes a lot of the emotion out of the process. If you review your trade confirmations, you will likely see they were buying when others were selling.”

Now your client can say: “I don’t get upset about the stock market like you do. My advisor and I have hired professional managers to handle the day to day stuff. When the market is volatile, I let them worry about it. It’s what they get paid for.”

Reason #4: I cleaned up my credit cards. I don’t owe anything.

The action: You also do financial planning with your client. In 2020, no one was flying overseas on vacation or staying at expensive resorts. They weren’t eating at lots of fancy restaurants either. You suggested they take all that money they saved and apply it towards their outstanding credit card balances. They paid them down to zero. They are incredibly proud.

The conversation: “Give yourself some credit. You did something great this year. You took all that money you saved not taking vacations and paid off your credit cards. Except for your mortgage, you are now debt free. Congratulations.”

Now your client can say: “I never thought I would say this, but I’m entering 2021 debt free! My advisor showed me how I could use the money I wasn’t spending on travel and pay down those credit cards charging 15%. She helped me find the silver lining in 2020.”

Reason #5:  Transparency of pricing. 

The action: Most of your clients are on fee based pricing. They use money managers in separately managed accounts. What they pay is very clear. You make it a point to explain it periodically.

The conversation: “You made money in 2020. It’s good to know what it cost you to make the money you did. You don’t own products with built-in up front charges or surrender fees. You pay (X)% on your assets under management. You are only charged for the time you are in the program.”

Now your client can say: “I don’t obsess over what my advisor charges. I pay a flat percentage rate on the assets they help me manage. It’s on a pay-as-you-go system. If I’m invested for six years, five months and four days and decide I want to use my money for something else, I’m only charged for the time they were working for me.”

Friends tell each other about their investments. They complain. You can see how your client can use their own words to relate what you do for them. No prompting or scripting is needed. Just have a conversation to remind them.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” can be found on Amazon.