As I meet with various groups on obtaining more referrals, one of the most frequently asked questions is, "How do you ask for referrals in a volatile market?" Well, we're all unhappy with the market (though, as of this writing, it's showing some signs of life). But while your clients may be unhappy with the market, are they happy with you? And how many potential clients are unhappy with both the market and their advisor?
This is a great time to be prospecting for new clients. There are a lot of unhappy people out there. A lot of people are second-guessing their advisors. Right or wrong, people are receptive to making a change. Your clients likely know other people who are more open than ever before to meeting with you. Are you taking care of your referability? And are you leveraging your referability by asking your clients for referrals?
Are you referable?
A volatile market is a true test of your client relationships. At a time when many reps are hiding under their desks, afraid to call their clients for fear of their wrath, you should be calling your clients more than ever before. If you've been advocating a long-term approach to investing, then you need to reassure your clients of that approach. If you haven't been taking a long-term approach, then it may be time to start.
You must create a systematic approach to staying in contact with your clients and stick with it. Your next great client will come to you through a referral from one of your current clients -- if you remain referable.
There are three main methods by which we stay in contact with our clients: transactional, value added, and business friendship. Of course, you must be impeccable about handling the transactional aspects of your client relationships. You must have great systems and standards in place. You must have top-notch staff in place. Still, as important as these aspects of our client relationships are, they're not what will create loyalty and generate referrals.
If you don't continue to provide value to your clients on a regular basis, you are no longer necessary. Keep looking for ways to educate your clients. Keep looking for ways to serve them with information that may have nothing to do with what brought you together in the first place. My financial advisor reviews the tax return prepared by my CPA. He wants to make sure all my investments are handled properly from a tax perspective. He's even talked to me about my homeowner's and health insurance -- though he sells neither. He says, "If it has a dollar sign next to it, I want to be involved. I can be a resource for you." That's continued value I truly appreciate.
You also want to build business friendships with as many of your "A" clients as you can. Use small client-appreciation events to get to know your clients in a more personal way; they get to know you that way, too. Have a systematic approach to building business friendships. Don't leave it to chance -- be proactive.
Make referrals about you, not the market.
When asking for referrals, always start with a "value-seeking question" that's not based on the performance of one's portfolio, but rather on your performance as their financial professional. If you have more than just a transactional business, but true clients with ongoing relationships, you will be bringing value to the relationship that goes beyond handling transactions and beyond market performance. If you're not bringing this enhanced value, you're probably not referable.
Your step into a value discussion might sound something like, "While we're both not happy with the market's performance over the last several months, I want to focus on our relationship and our communication. Is there any place you feel I or my staff have let you down? In what ways has our relationship and the work we've done been valuable to you?"
Now, you may be thinking, "This is a gutsy question." And I would agree that the first few times you do this might take a bit of courage. And while you might not choose the exact words I used to illustrate this point, it's important you check in with your clients in this way. From time to time, you must give your clients permission to complain and the opportunity to discuss the value. My guess is that most of the time, you're only going to hear good things. It will be a validating conversation that can lead to referrals -- on the spot or later. And, on occasion, you're going to encounter a client with an issue that they have not voiced to you. Sometimes you can fix the problem. Sometimes you can only hope to prevent it in the future. And sometimes you have no control at all over their complaint. However, in any circumstance, your client will feel better for having told you. This simple value check-in is a huge client loyalty booster. And, it often leads to referrals on the spot -- without you even asking for them. That's well worth any effort you'd need to put forth in your business.
Bill Cates is the author of the industry book "Get More Referrals Now" and the president of Referral Coach International. He can be reached at info@referralcoach.com. For more information, visit www.referralcoach.com. 
