Actionable insights straight to your inbox

logo_equities.svg

Younger Clients Turn What We Know About Referrals Upside Down

In a nutshell, younger clients tend to break the connection between satisfaction and referral activity more than previous generations.
IRIS is a collection of vetted experts, in unique areas, that offer information and services to make managing your business and interacting with your clients more impactful. We honor and address entrepreneurial innovation with a platform that’s about helping you become more successful in business and life. Learn more here.
IRIS is a collection of vetted experts, in unique areas, that offer information and services to make managing your business and interacting with your clients more impactful. We honor and address entrepreneurial innovation with a platform that’s about helping you become more successful in business and life. Learn more here.

Younger Clients Turn What We Know About Referrals Upside Down

In the words of the eighties musical ‘sensation’ C+C Music Factory, there are “things that make you go hmmmm.”

Today, I put the spotlight on some research that brings those words to mind. (And if my cheesy musical reference gets you in the mood for some of the questionable music we heard in 1990, click here.)

Every year we study investors and their relationships with financial advisors, to understand what they need, want and expect. In 2017, we made some adjustments to the study to focus in on high net worth clients, with a third of clients having $500k – $999k in total investable assets and two thirds with $1m+.

As a result of the shift in focus to high net worth clients, we saw exactly the kinds of differences you might expect. While clients are generally satisfied with their relationships with their advisors, high net worth clients are more satisfied, more loyal and more likely to refer.

What wasn’t expected was the connection between satisfaction, referrals and age. Specifically, I examined the data for clients who are under 50 years of age (a largely Gen X sample) and they surprised me.

In a nutshell, younger clients break the connection between satisfaction and referral activity.

For years I’ve highlighted the fact that satisfied clients don’t necessarily refer. That’s still true. I’ve also noted (more than once) that being comfortable referring doesn’t mean you will refer. That’s also still true. However, despite being an imperfect relationship, it has always been true that more satisfied clients are more likely to refer. Unless, it’s seems, if you’re younger.

Here’s the good news.

Clients who are 50 and under refer more often. So if you have been discounting the value of your younger clients, you may be missing out on an extraordinary opportunity.

It’s a fact. Younger clients refer more often

Because the sample in this study is all high net worth clients, the overall referral rate is higher than you might typically see. In our last study about a third of clients reported having provided a referral and we know, of course, that advisors don’t meet most of those prospective clients. When we look at clients with $500k or more in total investable assets, that number jumps to 50% so keep that in mind as a starting point.

To continue reading, visit www.iris.xyz

With pandemic-induced supply chain bottlenecks receding, semiconductor stocks have been riding a bullish trend, making higher lows and higher highs.
To say the current situation isn’t pretty now seems an understatement, and it’s likely to remain chaotic for a while. Which is why it’s so important for leaders of all kinds not to fall prey to the very human tendency to go negative.
Bargain-hunting friends of mine have been asking: “Should I buy First Republic?” After all, First Republic is prestigious. Facebook founder Mark Zuckerberg got a mortgage there. Dozens of customer surveys rate its satisfaction scores higher than super-brands like Apple and Ritz-Carlton.
Many of us economy-watchers have been expecting recession, though with significant differences on odds and timing. Regardless, recent banking developments just made recession more likely and may have accelerated its onset.