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“Bill – I was thinking that the volatile market conditions we’re experiencing might be a great time to ask for referrals. What do you think?”
That was a question posed to me in a workshop about a week ago. The answer isn’t a simple “yes” or “no.” As usual, “It depends.”
3 Possible Approaches to Introductions
Don’t Stay on the Surface
If your clients are invested for the long term and not dependent on receiving direct proceeds from their investments at this moment, then you have probably trained them to not overreact to big swings in the market.
The best metaphor for the stock market I’ve heard is that the stock market looks like someone walking up the stairs with a yo-yo. The yo-yo goes up and down, but the person walking continues to climb the stairs over time.
Even though your clients may tell you that they are doing okay and understand they’re in it for the long haul, don’t take what they say at face value. Go a bit further.
The concept of Loss Aversion tells us that the emotional response to a loss in the market is twice that of the emotional response to the same amount of gain in the market. The sting of the loss is sharper than the joy of the gain.
Therefore, when someone tells you they aren’t overly concerned about things, don’t assume that’s all there is to it. Probe a little further. Use the magic words, “Tell me more.” If your client is married, ask how their spouse is feeling. And ask what they are hearing from their friends and colleagues.
Do your best to not leave the appointment, or phone call, or virtual meeting with any emotional residue on the part of your clients. Make sure everything is clear and that they are feeling better. With some clients, you might want to call them a day or two later – to reiterate the right perspective you think they should have.
Promote Possibilities
I’m going to assume that you are not hiding under your desk and that you are tapping into your personal reservoir of courage and calling your clients who should be called. If you’re making these calls, then you have experienced your clients’ appreciation for being proactive, for not just waiting for the nervous ones to call you.
This is not a time to be reactive!
When your clients are appreciative of you reaching out and helping them gain perspective on the current situation, this can be the time to suggest possible introductions.
George and Martha – I’d like to alert you to something that you may experience over the coming weeks and months. You may find yourself in conversations with your friends, family, and/or colleagues about how everyone is weathering the volatile market.
If you learn that anyone is displeased with the advice they received or level of communication from their current advisor, please don’t keep me a secret. Please let them know that I’m never too busy to take a look at their situation, to see if I can be of any assistance.
Be Specific
If you have a strong relationship with your clients and they are truly doing okay in the midst of this volatile market, then it can still be possible to ask for specific introductions.
The conversation might go something like this:
George and Martha – What we’re going through right now seems to bring out the best and worst in my profession. Some advisors face these things head on. We reach out to our clients, as I have done with you, and do everything we can to provide perspective and make adjustments, if needed.
Other advisors are hiding under their desks or, in some way, avoiding the difficult conversations; leaving their clients to wonder where they stand.
I know that your sister and brother-in-law are in the area. Assuming we can come up with an approach that feels comfortable to everyone, how do you feel about introducing me to them – just to make sure they are being served properly and getting the information they need?
First and foremost – you must take care of your clients. It is times like this where your leadership is critical and appreciated.
Second – be willing to bring your leadership to others. Don’t wait for them to come to you. Be appropriately proactive!
Related: Want CPA Referrals? Do This First.