Jerry Murphey remembers the incident well.
Relatives of a financial advisor had won the lottery and purchased certificates of deposit from the local bank.
It turns out that they thought that the only place one could buy CDs is through a bank, and they didn’t realize that their advisor provided them as part of a broader product offering, says Murphey, president of RiskX Investments LLC in Portland, Ore.
“In the process of focusing on investment results, advisors can forget the importance of connecting with clients on a more holistic basis,” he says.
“It’s especially important if you want your clients to refer you” to others, Murphey says.
Here are five easy steps that advisors can take to more effectively interact with clients and increase their chances of getting referrals:
1. Identify and articulate unique value.In the process of educating clients about the advisor’s role, set a meeting to specifically focus on the client's total experience, rather than his or her investment portfolio, Murphey says.
Brent O’Mara, senior wealth advisor at Feltz WealthPlan in Omaha, Neb., a hybrid registered investment advisor within the LPL Financial network, also recommends a separate meeting.
“Don’t invade client time,” he says. “It should be respected and all about them, not you.”
2. Educate clients about the type of client the firm focuses on. Advisors who can get clients to understand the sorts of individuals they specialize in serving, may find that those clients tell others about the firm’s unique value and services, Murphey says.
“When you ask clients directly, some don’t know what type of clients you prefer to work with and how you serve them from a broader perspective,” he says.
3. Create a compelling brand to distinguish the business. "If you do not have a story or brand, it’s important you create one," O’Mara says.
“Being consistent is the key,” he says. “If you cannot repeat your difference in a consistent language to both clients and prospects, you cannot expect them to be a great advocate of your business when talking to family and co-workers.”
4. Ask clients what is the most comfortable way for them to provide referrals. “Ultimately, we need to ask clients what is the comfortable way to provide referrals,” Murphey says.
“Typically, when clients understand your purpose, what you do and your ideal client, they will be happy to refer you,” he says. “Some will say they’re simply not comfortable providing referrals, and that’s OK, too.”
5. Dedicate a meeting to getting feedback about the client’s experience. “You get a chance to tell your clients about your business model every day,” Murphey says. “That increases awareness and understanding, which leads to the potential to grow.”
The takeaway: “Great clients are or should be willing to help contribute to the success of your practice if you properly quantify things you have done over the years,” O'Mara says.
Bruce W. Fraser, a New York financial writer, contributes to Financial Planning and On Wall Street magazines.
This story is part of a 30-day series on how to generate the best referrals. It was originally published on May 7, 2015.