Good referrals and bad manners

(February 2008) Everyone knows the best way to build a business is through referrals. Referrals can come from many sources — friends, centres of influence and even the clients themselves. But are you properly thanking the source of your referrals?

If the source is a client, definitely. But what about referrals from other advisors?

One advisor I know — I’ll call her Laura — isn’t licensed to sell product, but regularly refers clients to others for help implementing her financial plans. These are clients who have at least $500,000 in investable assets — a dream for most advisors. Although the referred advisors do stellar work for Laura’s clients, they have yet to acknowledge or show appreciation for Laura’s move whatsoever. She’s absolutely thunderstruck.

“When I first started, the advisors would send a thank-you card. At Christmas time, they’d send a basket or at least a card,” she muses. “This year, I received one Christmas card from the 10 places I refer clients. We are so computer-focused today that [thanking] doesn’t seem to happen anymore.”

Finder fees don’t apply to Laura’s situation because as a fee-only advisor, she prefers to be paid only by her clients. She emphasizes that she’s not soliciting for gifts but “it just seems like something’s missing, you know? The referrals are going one way and there’s no recognition of that.”

Etiquette specialist Lew Bayer chalks the behaviour up to something else: laziness.

“It’s self-centred, arrogant and disrespectful,” says Bayer, partner of The Civility Group in Winnipeg. “We all have busy lives. If some of us can manage to be polite, respectful and courteous, we all can. She finds the time to send the referrals and she’s doing all the work. I think she deserves something for that. The referred advisor is certainly making significant money off that referral.”

Bayer says advisors need to thank their referral sources every time, regardless of whether the referral turns into a client or not. Here are some ideas of how you can show your appreciation.

Say thank you in person.

Bayer says this should always be the first option. “Whenever there’s money and emotion and trust at issue, face-to-face acknowledgment is always the most sincere,” she explains.

Pick up the telephone.

Call when you know the person will be in the office. Don’t call at 3 a.m. and leave a voicemail; this just tells the person you are trying to rush through the thank you process, Bayer notes. If you don’t get an answer when you call, it’s OK to leave a message but at some point, you should make sure that you actually talk to the referral source.

Send a thank you card.

This should not be a form letter or card done on the computer. The card should be in your own handwriting, with a well-thought-out message. It’s not enough to say, “Laura, thanks for the referral. Mike.” A message needs to acknowledge the person and how she helped you, Bayer says. “You want to thank people for the intangibles,” she says. “When someone gives a referral, they’re really selling your ability and competence. That’s a huge compliment.” A more appropriate note would take this tone: “Laura, I’ve appreciated the many referrals you’ve given me over the last year. It means a lot to me that you trust my ability to provide services to your clients. Thank you. Respectfully, Mike.

Send a gift.

It doesn’t have to be a direct money exchange, especially since this might make some people uncomfortable. How about a present for her kids, tickets to the movies or a gift card to her favourite restaurant? Bayer says a basket of muffins, cookies or flowers is also appropriate, as is taking the person to lunch.

There’s also something Laura can do for her part: touch base with the referred advisors herself to nudge them along. “Unfortunately, you can’t always expect people do what they are supposed to do,” Bayer explains. “She can call and say, ‘I referred three or four clients to you. I understand things are going well. Would you touch base with me and let me know how things are going for you?’ Of course, the onus isn’t on her to do that but as a responsible advisor protecting her interests, I’d be inclined to do that anyway.”

Laura also has another option: find more appreciative advisors who will do good work for her clients. Only then will the take, take, takers get the hint about decorum.

Filed by Deanne Gage, Advisor.ca, deanne.gage@advisor.rogers.com

(02/01/08)

Deanne Gage