A financial advisor walks into an accountant’s office. He thanks the accountant for agreeing to meet with him, then proceeds to present the case for why he is eminently qualified to provide financial advice to the accountant’s clients.
What happens next? Does the accountant agree to send a couple of clients his way for financial plans?
Not likely, according to Rudy Brugnerotto, a chartered professional accountant in Toronto. Accountants and other potential centres of influence (COIs), he says, have heard this all before. And the above approach is not likely to resonate with them or result in referrals.
Advisors are told again and again that COIs, such as accountants and lawyers, are excellent sources of referrals. But many advisors go about soliciting COI relationships the wrong way, according to Brugnerotto – especially advisors who start with a sales pitch about their expertise and services.
“Why would you make this presentation on what you can do,” Brugnerotto says, “if I haven’t told you my clients need those services?”
Instead of taking what Brugnerotto calls a “self-centred” approach, advisors should approach potential COIs with the goal of developing a strong strategic partnership.
Paul Tindall, president of Phoenix Coaching Works Inc. in Burlington, Ont., agrees. You must treat that potential COI as you would a prospective client, says Tindall, a business-development coach who works with financial advisors, lawyers and accountants. You need to understand why the COI might be interested in pursuing such a relationship and undertake a discovery process to find out how you might help that COI.
In order to develop a referral relationship with a COI, you first need to understand why the COI might be interested in pursuing this relationship. A simple, five-minute discussion in which both professionals describe their practices and their clients is a good start, says Brugnerotto. The objective is to see whether you and the COI would mutually benefit from working together.
Brugnerotto says such a conversation is productive from his perspective as an accountant when the advisor asks how long Brugnerotto has been in the business, what success he has had and what types of clients he serves. Brugnerotto then would ask the advisor the same questions.
“If we’ve determined there’s a fit, we can go into more specific questions,” he says. “If it’s not a fit, let’s finish our coffee and get out of here.”
If the conversation does lead to an understanding that the professionals should pursue a referral relationship, the advisor and the accountant are well on their way to developing a mutually rewarding arrangement. But it still may be months before the advisor receives a referral from that source.
Kevin Smith, principal at ICON Advanced Planning Inc. in Toronto, has developed referral relationships with several accountants. But after Smith had sent numerous clients to these accountants, his referrals were rarely reciprocated.
The problem is that accountants have nothing to gain by referring a client to an advisor, Smith says. Yet, they are taking a risk.
“If the advice that the advisor is giving works out well, then the advisor gets all the credit,” Smith says. “If it doesn’t work out, then the accountant gets all the blame.”
Smith had to determine how he could provide that first benefit to his COIs so that they would feel comfortable returning the favour.
He found that client surveys could be helpful – both in clarifying the needs of his clients and in finding out whether he could help the clients of another professional.
For example, you can perform an audit of your clients and share the results with a COI in the hope of advancing your relationship. By asking your clients how satisfied they are with your services and those provided by their accountants and lawyers, you can demonstrate to the COI that you have clients who might be interested in working with a new accountant or lawyer.
As well, your clients’ level of satisfaction can show that COIs can trust you to provide their clients with good service.
Once you have developed a good rapport with a COI, recommend that he or she conduct a client audit as well.
(For client audits, Tindall recommends using a third-party service that is experienced in drafting surveys and analyzing that information, such as Boston-based Dalbar Inc., which has offices in Toronto, and Toronto-based Advisor Impact Inc.)
Through this survey process, Smith was able to help his accountant COIs discover what was missing from their practices. In some cases, it was the more personal touch that goes beyond preparing financial statements and tax returns.
“Quite often, accountants are used to working [only] with numbers,” Smith says. “They generally don’t approach the whole aspect of developing a sense of comfort around what’s going on in a client’s life.”
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