MASELLI: You must demonstrate that you're an intelligent professional when it comes to the emotional side of referrals by talking honestly about the risks. Don't pretend that, when a client gives you a referral, there's no risk to him. Explain to the client, "When you give me the name of your friend, there's danger in that for you. The danger is that if I screw up, your friend may resent you. So let me tell you how I handle referrals because I want you to be comfortable." Could this scare some people away? Yes. But if you don't talk about the risks, does that mean they go away? No. The risks are still there, and you're just hiding from them. By talking about the risks, you demonstrate that you're aware of them and your client will have more confidence and trust in you.
GLUCK: And you like advisors to provide details about how they manage referral risk.
MASELLI: Yes, it's smart to walk the client through your entire referral process. Show the client letters that you send to people referred to you. You want them to know that you won't annoy their friend by calling them at dinnertime, for instance. You want them to feel comfortable that you will handle their friends carefully. That's where the referral guide helps. You give the client a booklet detailing how you will treat friends they refer to you. You put sample newsletters in the referral guide, articles written about you and a list of your services. Clients may not know all of the different services you provide. You may manage a mutual fund portfolio for the client, but the referral source may be interested in separately managed accounts. So you need to briefly explain all of your services in the referral guide. The fact that you give your client this booklet tells him that you will handle his referral carefully.
GLUCK: Another aspect of your process is touching clients frequently. You recommend 40 touches a year. That sounds like a lot of work.
MASELLI: Some of those touches can be automated-a letter, e-newsletter or magazine subscription. But you can't meet with your clients 40 times a year. And while phone calls are nice, they're not a high-value touch.
GLUCK: They're not?
MASELLI: No. Only if your phone call imparts some wisdom or you have something important to say will it be valued by a client. The phone today is very misused. A monthly phone call-even with no specific message-is good, but it must be augmented by other touches.
GLUCK: You like newsletters. Right?
MASELLI: I love them.
GLUCK: Advisors often think their newsletter has to win them new clients. I have heard advisors say, "Nobody ever hired me because of my newsletter." And I know advisors who have stopped sending their newsletter for a quarter or two as a test, just to see if any clients notice. If no clients ask about what happened to the newsletter, they stop sending it altogether because they say it's not helping them. They have a point, don't they?