Joanne Livingston has never been good at cold-calling. That’s why she has focused on ways to make her clients her advocates, leaving them to generate referrals.

It has worked. Livingston, an advisor with Richardson Partners Financial Ltd. in Ottawa, manages money for 175 households. She spoke at the Top Advisor Summit in Toronto last month.

“When I was asked to speak at the conference about keeping clients and getting referrals,” she says, “it really forced me to look back to how I got from A to B.”

Livingston sums up her strategy in one simple sentence: “Generating referrals is about doing good things for your clients — and telling them what you are doing.”

To put it another way, Livingston quotes a Chinese proverb: “Work with one hand and wave a flag with the other.”

In more practical terms, the first step in gaining referrals, Livingston says, is to make yourself referable. She cites a 2008 study by Toronto-based Advisor Impact Inc. that found that clients initiate more than half of referrals. In most cases, clients had provided a referral after a friend or colleague told them about a financial issue. The message Livingston took from that: if your clients think highly of the work you do for them, they will recommend you.

And part of making yourself referable means showing clients the value of what you do for them. When working with a client, Livingston says, it’s important not only to solve their financial problems but also help them understand what it is you’re solving.

“A financial advisor provides an abstract service,” she says. “That’s why you have to point out to clients what you are doing for them.”

A newsletter — one that lays out the services your team provides — is an effective way to remind clients of your value. Take tax season, for example. As tax time approaches, the newsletter can remind clients that your team is busy putting together clients’ tax packages and may be calling soon to discuss tax-saving opportunities.

It is also important to have a process, says Livingston, “any process.” But be systematic.

She also recommends sharing your process with clients. Annual reviews are a good opportunity to walk clients through the procedure you follow in managing their accounts.

Part of Livingston’s process is to prepare a one-page financial worksheet for each client that outlines the client’s progress toward his or her financial goals.

“The worksheet enables clients to see clearly where they are in their process,” says Livingston.

Focusing on the details of the client/advisor relationship also demonstrates your value. For example, you can make client meetings an “experience” — as opposed to a chore, Livingston says. Her clients are greeted by a staff member the second they step into the office and are immediately offered a beverage and parking validation.

In addition, she says, it’s important to say “thank you” any time clients send in cheques, transfer forms or other documents. Follow that up with a $5 coffee card or a phone card — an inexpensive but tangible gift for which the client will remember you.

Thus, Livingston taps into the opportunities that lie within her book. The magic of referrals, she says, lies in compounding. Five new referrals a year, each bringing in $500,000 in assets and growing at 5%, can increase assets under management by $15 million in five years.

Livingston didn’t learn these techniques overnight. She got her start in the financial services industry in 1982, when she joined Toronto-Dominion Bank in Ottawa. Her days with a retail branch in the 1980s provided an invaluable education. She was promoted into the management trainee program and became involved in various investing and lending roles, but she found her entrepreneurial skills were lacking. She honed those skills at investment dealers Midland Walwyn Capital Inc. and ScotiaMcLeod Inc. before landing at Richardson Partners in 2007.

Outside of the office, the wife and mother of two 20-something sons switches gears from forward-thinker to embracing the present: “If I can keep myself healthy and finish educating those boys and play some golf and have some friends, that’s a pretty full life.”

The power of referrals



Part 8 of a series shot on location at the 2009 Top Advisor Summit. Joanne Livingston, an advisor with Richardson Partners Financial Ltd. in Ottawa, describes the processes that lead to building a business using referrals.

@page_break@IE