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Your Practice: Quick way advisers can boost referrals
June 7, 2012 / 9:02 PM / 5 years ago

Your Practice: Quick way advisers can boost referrals

(Reuters) - For advisers, getting high quality referrals might require a counterintuitive approach: publicize exactly who you’re willing to work with.

That means advertising the minimum assets a prospective client must have before you’ll work with them. Many advisers are uncomfortable doing this - often because they want total control of their referrals or worry about scaring off clients just below their threshold.

But people are more likely to not refer a friend or colleague to you than have to ask them how much money they have, or risk seeing that friend rejected because they don’t have enough money to become a client.

If an adviser posts the asset minimum on his or her website, people can send friends to the site - no questions asked - and they will know right away if it’s worth contacting the adviser about becoming a client.

Advisers who have already posted this information on their website say being upfront has made people more willing to send new clients their way.

“The whole point at the end of the day is to make it easier for the client,” said Michael Kitces, a partner at Columbia, Maryland-based Pinnacle Advisory Group, a firm whose website says its asset minimum is $750,000.

REFERRAL JUMP

In the six months after Pinnacle posted its asset minimum, the firm got 20 to 30 more referrals than usual, Kitces said. When the firm asked its clients why they were sending more referrals, they cited the addition of the minimum to the site.

“We had people who wanted to refer, but no longer were afraid to do so,” Kitces said.

Jeanie Wyatt, chief executive of San Antonio-based South Texas Money Management Ltd, has always posted her asset minimum - currently $500,000 per family - on her website. She’s convinced it boosts referrals because her clients tell her they would have assumed her minimum was about double that figure if she hadn’t made it clear on her site.

“I think the general public automatically assumes that to go to a wealth adviser, they have to have $1 million or more,” said Wyatt, who says her firm gets 10 to 20 referrals a week.

Some advisers may think it’s crass to put asset minimums online. But Alexander Camargo, a wealth management analyst with the Boston-based research and consulting firm Celent, said advisers should still make clear the type of clients they are looking for.

As a middle ground, advisers can describe their ideal client without using dollar figures. For instance, Los Angeles-based Aspiriant works with clients who have $8 million in investible assets on average, but the firm sometimes goes far above and below that range.

The “Who We Serve” section of its site says that its clients include “successful professionals, corporate executives, business owners, entrepreneurs, and individuals and families with substantial and complex assets.”

This gives the firm the chance to field calls from a range of prospects, said Sandi Bragar, director of planning.

Other firms list their asset minimum, but give themselves some wiggle room. For instance, after saying it has a $750,000 account minimum, Pinnacle Advisory lists exceptions it makes, like for the children of an existing Pinnacle client.

NOT FOR EVERYONE

In theory, New York-based Christopher Street Financial is the type of wealth management firm that could benefit from listing its asset minimum of roughly $500,000 on its website.

Christopher Street specializes in managing money for gay and lesbian clients, and the firm gets about half a dozen inquiries a month from people who simply Googled phrases like “gay and financial adviser,” said President Jennifer Hatch.

Those inquiries rarely turn into new business, but Hatch said she doesn’t want to lose such queries by putting that asset minimum on her site. She says it benefits her firm’s reputation when she directs people to alternate resources.

“It’s a small community, and I want to be perceived as a resource for people,” she said.

Tony Montanari, managing director with Charlotte, North Carolina-based ACM Wealth Management, wants his clients to know his asset minimum of roughly $500,000, but not via his website. He doesn’t want to offend long-time clients who don’t meet the minimum. Instead, he slips his preferred minimum into conversations with his top clients.

“I‘m a believer in advertising the minimum, but ... on a one-on-one basis,” Montanari said.

Reporting By Jennifer Hoyt Cummings; Editing by Jennifer Merritt and Richard Chang

Our Standards:The Thomson Reuters Trust Principles.
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