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Practice Management

Advisors who clearly articulate their specialties, the services they provide, and the type of clients they prefer are more likely to get introductions.

This Practice Management article is intended for financial advisors only (registered representatives of broker/dealers or associated persons of Registered Investment Advisors).

Jerry Murphey remembers the incident well. Relatives of a financial advisor had won the lottery and purchased certificates of deposit (CDs) from the local bank.

It turns out they believed that the only place you could buy CDs is through a bank, and also hadn't realized that their financial advisor had provided CDs as part of a broader product offering, says Murphey, president and CEO of FolioMetrix, an investment management and research firm in Portland, Oregon.

"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.

What follow are five easy steps financial advisors can take to more effectively interact with clients and increase their chances of getting referrals:

1) Identify and articulate your unique value.
In the process of educating clients about your role, set up a meeting, Murphey advises, to specifically focus on the client's total experience rather than his or her investment portfolio.

Brent O'Mara, senior wealth advisor at Feltz WealthPlan, in Omaha, Nebraska, a hybrid RIA [registered investment advisor] within the LPL network, also recommends a separate meeting. "Don't invade client time," O'Mara says. "It should be respected and all about them, not you."

2) Educate clients about the type of client you focus on.
If you can get clients to understand the sorts of individuals you specialize in serving, they can tell others about your unique value and services, Murphey says.

"When you ask clients directly," he says, "some don't know what type of clients you prefer to work with and how you serve them from a broader perspective."

3) Create a compelling brand to distinguish your business.
"If you do not have a story or brand, it's important you create one," O'Mara says. "Being consistent is the key. 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. Some will say they're simply not comfortable providing referrals, and that's okay 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 

Bruce W. Fraser, a New York financial writer, contributes to Financial Planning and On Wall Street magazines.



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