A 6-Step Referral Script for financial service professionals in a down market

If the conversations you are having right now with clients are about their declining portfolios, where is the opportunity to get more referral business? Your strongest desire is likely to calm their fears and get off the phone.

One of the few advantages to a challenging economy is that everyone is talking about that frequently taboo topic: their money – something that happens much less when times are good. Unless your client leads a people-free existence, they are hearing others who are close to them expressing their frustrations and worries! Your first job is to find out who these people are.

What IS bringing in referrals for some financial advisors is a differently focused conversation about the people who are being ignored by their advisors and/or would appreciate being able to talk to someone who can address their anxieties. Everybody is seeking answers at the moment. Why not position yourself as the safest resource?

I presented at a seminar last week where one of the other speakers was a prominent Washington financial analyst. As much as I’d love to claim this about my own presentations, I have never seen an entire room of people leaning forward on the edge of their seats. And many of these people were in the business! That room wanted answers. That room wanted some statistics to back up the points being made. That room desperately needed reassurance.

You can do the same AND you can discuss with your clients other specific people they know who should seek out your expertise.

(What follows is an adaptation of my usual 6-step referral conversation and I owe significant thanks to several FA clients in Fort Worth, TX for re-developing parts 2 and 3)

Step One: ACKNOWLEDGE YOUR CLIENT:

YOU: “There are two or three things I'd like to touch on briefly before we wrap up. First, I want to acknowledge you for expressing your concerns and not putting your head in the sand. More than that, I want to commend you for not reacting emotionally to what’s been happening by pulling out of the market. Many Americans have done that and it’s easy to do if you ever base your opinions on what we hear on television!  I prefer to follow a role model like Warren Buffet who knows a great long-term opportunity when he sees it."

(Let this sink in for a moment. Once in a while a well-placed compliment leads to a referral on the spot. Why? Because we are all deprived of frequent positive recognition.)

Step Two: FIND OUT WHAT VALUE HAS BEEN RECEIVED:

YOU: “I am curious to find out: how has this conversation helped today?”

 (They respond)

YOU:  “I appreciate that feedback. That’s great to hear.  Anything else?”

(They respond)

YOU:  “Thanks. I hope you know we’re doing our very best!”

(If at this point you have got positive feedback and know your client understands you have done your best, continue with this conversation.

If feelings still appear to be negative, end the conversation and work on making future positive emotional bank account deposits.)

Step Three: Get Specific: identify actual referral prospects

YOU: “You know, it’s been real interesting.  We’re finding that most folks don’t talk about their money with their friends and family when the market is good. However, when the market goes down as we’ve experienced and investors are fearful, everybody seems to be talking about their money. 

(Being genuinely curious): Are you finding the same thing?”*

(Pause to allow your client to elaborate)

YOU: “What are you hearing?”

(Let your clients talk and hopefully mention specific people they have talked to recently. If they don’t mention names, be genuinely curious and say: Was this a client of yours? Someone in your family?)

YOU: “It’s interesting: we have been adding new clients lately as a result of some these conversations.  I attribute it to the fact that a lot of financial advisors are not returning client phone calls or simply going out of business.” 

(Consider including a true short story. One FA client of mine tells his clients this: “I got a new client a couple of weeks ago whose financial advisor happened to be his own UNCLE and after three unreturned calls he got fed up and contacted me.”)

*An alternative question that also works is: Who have you heard talking about it?

Step Four: Directly ask for the specific person mentioned:

YOU: “You mentioned David, your client who owns the IT company; do you think he might appreciate having a conversation with us? We’d be happy to share with him our views about the market or even possibly provide a second opinion to make sure his assets are properly positioned.”

Provided your client says anything other than ‘no’:

YOU: “What would be the best way to find out if he might be interested?

Would you mind asking him or shooting him an e-mail to see if he'd be interested in a quick conversation?”

Step Five: Coach Them to Warm Up the Referral

 YOU: “That’s great.  I appreciate you recommending David. The easiest thing to tell him is that:

a) You’re comfortable and confident in the work we do
b) You highly recommend that he at least have a quick conversation with me, and
c) Would it be okay if I gave him a call in the near future?” (keep this vague)

This step is important so you make sure the right thing gets said. Most clients have no idea how to talk about you do. Feel free to modify part a) if you get other great feedback from your client. Use their wording if possible.

Step Six: Keep Control of the Process!

YOU: Thanks for doing that.
“Oh, and when should I get back to you to see if he would like me to give him a call?”

The last thing you want is to ‘hope’ the phone will ring. Ideally, have your client tell you when to call. It makes following up much more comfortable (and effective) because it makes you look like you’re just diligently following up on that suggestion.

Change the wording only to fit your personality. These 6 steps are worth practicing for conversations when the primary topic of conversation is your client’s investments in a down market. Otherwise if you’re talking to a happy client about insurance or guaranteed-income products, you’re better off sticking to the traditional 6 Steps to an Effective Referral Conversation or whatever system you use that gets you good results.