3 Ways to Improve Advisor Technology

Although there has been much media coverage in recent years about the decline of referral marketing as the primary source of growth for financial advisory practices, referrals are critical for ensuring the success of independent advisors’ businesses.

When a client feels their advisor is making a meaningful effort to understand and serve them, they are more likely to recommend their advisor to others. A positive client experience is essential to positive word of mouth.

Below are three ways that advisors can improve the quality of their clients’ experiences, and encourage clients to spread the word about their service offering.

Remember the Little Things: Any interaction, no matter how small, contributes to the health of a trust-based relationship between advisors and their clients. Calling to wish clients a happy birthday, or sending a birthday card and gift, are ways to let clients know you’re thinking about them, and are there for them when they’re needed.

Advisors can also utilize their in-depth understanding of each client’s financial goals and personal circumstances to proactively reach out with relevant market insight—and the insight can be generally related to a client’s family or financial future as opposed to investment-focused. For example, an advisor can take the initiative to call a client after reading a news article about mortgage rates to say: “Hey, I saw that interest rates on mortgages are going up, and I remember we talked last year about you wanting to buy a house. Let’s talk about the impact these rate increases will have on your goal.”

Emphasize Your Expertise: A big part of an advisor’s value proposition is the ability to draw on their experiences working with clients over the course of many market cycles and conditions when providing advice. Advisors can utilize their expertise by personalizing market commentary they send to the needs and goals of each client.

But advisors can also take the time to show clients how a specific recommendation would benefit them, and how not implementing the recommended action in the past—before they worked with an advisor—hurt them. Making that connection for clients, by demonstrating the value they bring as an advisor, can be very powerful, and increase the likelihood that clients could tell their friends something along the lines of, “Hey, I’ve got this smart financial advisor who did XYZ with me, which led to a better outcome than I’ve had in the past.”

Don’t Be Afraid to Ask: Those who never ask, never receive. Advisors shouldn’t let themselves be constrained by shyness or a fear of appearing pushy. An advisory practice is a business just like any other, and as such, referrals through word of mouth are important for increasing revenue and profits. Advisors can certainly slip in a harmless plug at the end of a meeting or conversation with a client—something like, “If you’re happy with the service I’ve provided, please don’t hesitate to tell a friend”—without giving a bad impression. Another potential tactic is to give a client two or three business cards instead of one.

Advisors can also plant the seed in a client’s mind by saying, “This type of strategy can help you, and also other people in your situation.” This can be especially effective with a client who fits an advisor’s niche practice area, or their idea of an ideal client.

Referral and marketing expert Bill Cates told James Pollard that one line advisors can use with clients to generate referrals is simply, “Don’t keep me a secret!” As James Pollard wrote on his website, “I severely underestimated the power of this little line, but it works magic.”

Little things always make a big difference when it comes to satisfying clients and eliciting referrals. Referral marketing may not be primary method of growing all practices, but it is a vital element of running a successful business.