Ask a group of advisors about the key to getting new clients, and chances are that all the answers will relate to referrals. Indeed, a cottage industry has sprung up of referral coaches promising the magic formula to help advisors frustrated that ungrateful clients aren’t providing enough of those valuable introductions.
Referrals play a big role when investors choose an advisor. After all, in a skeptical and uncertain world where investors aren’t sure who to believe, a referral transfers the trust your clients have in you to their friends and family. That’s why I was surprised last year when research from Cerulli Associates found that referrals aren’t as dominant in attracting new clients as had been believed.
In fact, among sophisticated clients, referrals aren’t even the most important determinant in deciding on an advisor.
The other “R” that drives new clients
How to win multi-million dollar clients
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The factor that’s more important than referrals: reputation. According to the Cerulli report, just 11% of affluent investors cited referrals as the key reason for selecting advisors, as opposed to 13% who made their decision based on the advisor’s reputation.
This is partly because of a big change in how investors pick advisors. Twenty years ago, when you got a referral, the odds of converting that prospect to a client were very high. Today, affluent prospects solicit multiple referrals and interview three to five advisors before deciding. While at one time, a referral won you the game, today it just allows you to compete against the other contenders – it’s what you do after the referral that counts. (Click here to see how a successful entrepreneur chose from three different advisors.)
In Cerulli’s research, 13% of investors talked about reputation as the main reason for selecting a new advisor. (Other important factors were quality of service and fees.) Reputation especially mattered among older and younger investors, with a third of investors over 80 and almost 20% of investors in their 30s pointing to an advisor’s reputation as the critical factor in their decision. The benefits of a strong reputation aren’t limited to converting prospects – the stronger your reputation within your target community, the more comfortable clients will feel introducing you to their friends.
A plan to build your reputation
Your profile in your target client community has always been important, but this research gives added urgency to managing your reputation. Today you need to treat your reputation as an essential business asset, just as you would any other critical asset in your business. Your reputation is too important to be left to chance – you need a plan to build your profile and reputation in the community that you serve.
Let’s suppose you decide to invest three hours a week to enhance your profile and reputation. You could pick one of the following five ways to spend that time:
- Take a leadership role in a charity organization
- Get articles published
- Be quoted in the media
- Write a book
- Build an online brand
Here’s how to tackle your chosen tactic.
Take a leadership role in the right charity
Many advisors are extensively engaged in good works, not with any business goal in mind but simply as a way of giving back to their communities. Any efforts to make your communities stronger should be applauded. But if your goal, in addition to giving back, is to build visibility among existing and prospective clients, then something else is required – and that’s to stand out by having a leadership role. There’s absolutely nothing wrong in being active in numerous local groups – but until you take on more significant responsibility, your involvement often goes unnoticed.
When I talk to advisors who report that community activity had an important role in building their business, they invariably had a visible position. If part of your motivation for volunteering is the impact on your reputation, you’re better off focusing your efforts and becoming a leader in one organization than attending meetings of four or five different groups but never playing a senior role. Once you’ve decided on the organization on which to focus your efforts, a simple rule of thumb is to volunteer to serve on the fundraising committee. Fundraising is both critically important and the area that typically has the least number of volunteers eager to help.
Picking the right charity is important as well. In many communities, the most prestigious charities also have the most competition from other volunteers. Again, if part of your goal is to enhance your reputation, you’re better off focusing on a charity that’s one or two steps down in glamour.
Getting articles published
This is the starting point for many advisors who seek to enhance their reputation. To do this, first spend a couple of hours reading past issues of the key publication for your target audience. Then contact the editor, explain that you work with a number of members of that group and ask if you could submit an article on the key financial challenges for this target community. If the answer is yes, ask about guidelines for column length.
Research the group’s particular problems and needs. Rather than writing an article, for $250 you can hire a freelance writer to interview you, take your ideas and turn them into a column. Take a look at sites like Elance.com, freelancer.com and guru.com to find freelancers; this link provides an overview of sites where you can find freelancers.
Get this initial article right – before submitting it, run it by a couple of members of the group to get their suggestions.
Let’s assume the publication runs your article. Your next step is to follow up with the editor to explore his or her interest in a follow-up piece, with the ultimate goal of becoming an ongoing contributor. Don’t expect the phone to ring when those articles appear. Remember, the reason you’re doing this is not because people reading your article will call you. It’s to be able to post a link to your site as a credibility builder and enable you to proactively reach out to members of the group.
As an example, one advisor I talked to specializes in working with faculty members at a large local university can convert their pensions after they retire. Fifteen years ago, he started with one client in this group and spent the time to understand the intricacies of the options for retiring faculty. He then approached the person responsible for the quarterly newsletter for faculty. Since then, every quarter issue has run his column on financial planning. That column has been instrumental in making him the safe choice for faculty at that university, who today represent more than half his clients.
Being quoted in the press
To become the go-to expert for a group, spend 30 minutes each week reading the publications that target them and that they read. Not only will you learn more about their issues, but you can watch out for articles that touch on financial or business topics.
Drop a note to the authors of those articles commenting on what they’ve written — your goal is to make a positive comment but also point out something they may have missed. If you’ve been published, you can attach an article you’ve written. The author of the article may be an employee or a freelancer who does ongoing work for the publication. In either case, your goal is to position yourself as a resource that he or she can talk to and quote for future articles. If the writer lives in your city, suggest connecting over a coffee to talk about the challenges that you hear from the group you’re serving. And again, post links to any articles in which you’re quoted on your website.
An advisor I know, who specializes in planning for people approaching or in the early stages of retirement, is the go-to source for journalists in his city. Whenever he sees an article on retirement issues, he contacts the journalist responsible. Because he’s knowledgeable and works on delivering pithy quotes, he’s become the safe choice for journalists in his city writing on retirement-planning issues.
Publish a book
While writing articles is a great credibility builder, there’s nothing like having your website list you as an author (and offering interested prospects a copy of your book). Whether an e-book or a hard cover, technology has made self-publishing a book easy and cost-effective. In this interview, an advisor describes how publishing a book helped position him with existing and prospective clients alike.
Build an online brand
Especially if you’re targeting a younger demographic, the final way to build your reputation is to build your online brand. Here’s an excerpt from an article on this subject:
Defining a differentiated brand and value proposition by becoming a thought leader for their target market is one way advisors with limited resources can foster their reputation, and making their work “findable” online will help get it noticed. Collectively known as content marketing, producing, collecting and sharing content that appeals to a particular audience is an incredibly effective (and accessible) way to position oneself as an expert.
Blogging, content curation and social media are three tactics available to any advisor with ideas that they wish to share and an audience with whom they are willing to engage. Think of content marketing as a super-charged replacement for the quarterly newsletter. The message is far less dependent on the timing of its dissemination and its value accrues over time because it resides on the web waiting to be found by future prospects.
Younger generations do their own homework… Rather than seek the opinion of their peers, their first instinct is to turn to the almighty purveyor of knowledge and expertise (Google) and figure it out for themselves
Everyone is tight for time. Even so, given the importance of your reputation, spending three or four hours a week elevating your profile by using one of these strategies could be one of the best investments you make this year.
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.
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