Participants:
Steve Wershing
Julie Littlechild
Julie Littlechild: Advisors share so often that they believe that COI referrals can be one of the best sources of new business. And at the same time, they say they’re just not getting the best possible return. And we happen to believe that both of those statements are true, but that you can greatly improve the number of referrals you get from professionals by understanding why they don’t refer more now and getting intentional about how you nurture those relationships. So, we’ll talk tactics, and I think you’ll get a lot of value out of the conversation. And with that, let’s get straight to it. Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: And so, I think, some of what you were observing there is that they’re approaching it from a sales standpoint. They want to sell the center of influence on giving them referrals when really it should be about marketing and it should be, “What can I communicate to folks? And how do I get into a relationship with them?” Because ultimately referrals come from relationships. So, it’s all about developing that. But there are some other things that contribute to that and that make it, that makes centers of influence, many of the ones that we talk to, even more of a challenge. And a lot of it has to do with what risks do they face? So, we, in the financial advisor space, talk a lot about the fiduciary standard and how can we become better fiduciaries and how can we do things more in a fiduciary vein. Accountants and attorneys, this is not a conversation for them. They’ve been living it for a long time. And so, they really get the whole fiduciary thing. And so, it’s a reflection of where they’re at a different spot than we are. And so they have that fiduciary responsibility to their clients. So, there are risks that they take on if they were ever to share a thing. And so you can’t do it with a transaction, you have to do it with a relationship and really help them understand how referring somebody to you a specific client is a way of fulfilling some of that fiduciary responsibility to that client. But what have you observed about what centers of influence expect if they were to get into a referral relationship like this? Julie Littlechild: Steve Wershing: Julie Littlechild: And then the other piece of it was, and maybe it’s related to taking the time, is getting to know their business so that you can also refer the right people to them. So, often advisors would say, “Well, I’m referring some business to you. In the hope that reciprocity would kick in.” But if you’re referring the wrong people to them, because it’s not the focus of their business, or they don’t want individual work, they want corporate, or they have their own… So, those are the things that came up and it’s, yeah, you’re right. It’s just all about taking the time to understand to say, “I need to vet these people the same way I would vet any partner with my business.” Steve Wershing: Julie Littlechild: Steve Wershing: And part of that, from my perspective is, is having a process that is tailored to your target client. Because, if a center of influence understands that you have a particular expertise and a particular kind of client, and you can show them, “Okay, so when someone comes to us, here’s what happens. Here’s the process that they go through.” And it’s not just simply, “We have a discovery meeting and then we present the plan and then we implement things.” But it’s more of, “We examine this and we explore that. And then we address this particular issue. And then we formulate solutions because we have these different solutions for that kind of person.” That lowers the risk dramatically. The process that we use here is understand the client, understand their unique challenges and then have a plan to help them overcome those challenges. And I don’t mean I do a plan for everybody. What I mean is that when we find people in this particular situation, we know how to get them through it, and this is how we do it. And so if you present that to a center of influence, then they can come to realize, “Oh, I get it. You have some expertise at this. You have a strategy for helping people do this.” And from my perspective, that dramatically lowers the risk because now that center of influence has an understanding of your expertise and where you’re going to take those clients if they come to you. Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: And they may not necessarily be signing up for the team to be the tight end as opposed to the quarterback. And if you look at public surveys and I’m going to ask you about this, because I don’t know if you’ve done research like this, but when they do public surveys and they ask about who’s most influential in the financial area, what I’ve seen is that usually the CPA is the one that comes out on the top of the heap. What have you seen [crosstalk 00:13:51]? Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: And with an accountant, for example, before taxes, and you can call up all those accountants of your clients and say, “I want to make, I know that… We do our business all year long and it doesn’t matter when clients come see us. But we know that all of your clients come see you sometime between February 1st and April 1st.” And so, you’ve got [inaudible 00:15:39] what can we do to help you have the stuff that you need to be able to prepare our mutual clients return? And that’s just being a team player. That’s just showing them that you want to work together with them, and that you want to play together as a team, and that you want to work, you want to do that so that it helps the client get a better outcome from everybody. Julie Littlechild: In fact, and this, it’s only been once or twice, but I’ve seen advisors, when we’re working with them on gathering feedback from their clients, they want a separate survey to gather feedback from their COIs so that they can say, “How was the process of working with us?” Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: So, New York relaxed some of those rules so that you could in fact update your will without necessarily getting person to person with some of the people that needed to be there. And so some of the attorneys told us about that. And so we communicated that to everybody that was an important development in a state law that our clients needed to know about. So, it’s things like that, that I’m talking about. Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: We also routinely include a center of influence or two in client advisory boards. And we do that for a few reasons. One of them is that obviously one of the objectives, not one of the direct ones, but one of the ones that comes out of that experience is that the people on the board tend to become better referral sources. And so, any of your clients are probably in a position to refer you one or a few times a year, but a center of influence is potentially in a position to refer you all the time. And so having them in your advisory board can be very powerful. But they can also speak for a broader segment of your clients. So each of the clients in the room on the board can speak from their own experience. But if a center of influence has referred a few people, they can speak on behalf of all of those people that have referred you. And then, on top of that, of course, it’s never a bad thing to get a center of influence in a room and have a dozen of your best clients just talk about how much they love you in front of them. That can be nice. That it’s limited in scope because you can really only do it one or two at a time until their rotation on the board is over, but it’s powerful when you can do it. Julie Littlechild: Steve Wershing: Julie Littlechild: But at the same time, they each seek cross-selling opportunities for the other. So the accountant includes a conversation or a question about, “Are you interested in learning about.” It could be wealth management or do you have a financial plan right now? Or that sort of question. And the financial advisor asks if they’re happy with their accountant, or if they’re interested in certain types of consulting tax strategy. And so what ends up happening is they’ve both unearthed opportunities for one another. It still has to be confidential, we can’t just share that information, but as you can imagine, it goes straight to a, “Look, I saw that this is what you said, are you interested in me making an introduction? Because I think this would be great.” And it’s incredible how much comes out of just that opportunity. The, biggest opportunities we’ve seen on Earth is serving an accountant’s clients and finding how many of them aren’t working with a professional advisor or don’t- Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing:
Welcome to Becoming Referable, the podcast that helps you become the kind of advisor people can’t help talking about. I’m Julie Littlechild, and today my co-host Steve Wershing and I are speaking with one another and we’re going to shift gears from client referrals to referrals from centers of influence. Now, we talk a great deal about what makes a business more referable. And the reality is that the things that make you referable are the same, whether we’re talking about referrals from clients or other professionals.
Well, Julie, today, we want to talk about referrals as we always do, but we want to talk specifically about a source of referrals that is very attractive to advisors and that a lot of advisors are challenged by, and that is centers of influence. So first, let’s start with some of those frustrations, there for a lot of advisors, there are a lot of things that they’ve tried that don’t seem to work. And what kinds of things have you heard about that don’t seem to work? Or what kinds of things have you heard back from advisors about some of their challenges with this?
Yeah, I think you’re right. I think it’s generally accepted that COI referrals are a great way to go. And then such a large proportion of advisors, to me, will say to me some version of it just doesn’t seem to work. It just, I can’t make it work. The two things that I think jump out at me when it’s not working in that sense is, first of all, that we start looking at it as a referral strategy instead of a client engagement strategy. And I actually think it starts with client engagement, because if you can build a network of professionals around you and you’re doing that because you know it will add value to your clients and your ideal clients. So, that would influence who’s in that network. Then you should want to do that just to add value, right?
Right. Exactly.
But it forces you to focus on who the right people are. And when we think of it that way, I think it changes our perspective. And then the second part of that is, is related, I suppose, and that’s just that too often when I hear like… I’ll use an extreme example, but, “Well, I called that accountant and I said, ‘Are you interested in having me work with some of your clients?’ And they said no. So, clearly that doesn’t work.”
Right, right. Sure. Yeah, that’s extreme. But yeah, I get it.
It’s extreme for emphasis. But I think the point is that too often we’re thinking about the approach as more like a referral pitch. “Hey, what can I tell you about me that’ll get you referring me to your clients?” Instead of saying, “I’m looking for partners.” If you are legitimately looking for a partner to add value to your client, the fact that they provide referrals and are reciprocal, I think, should be part of the criteria there. But I do think that that gets you much closer to an effective strategy. So absence of those two things, I think, that’s what we see going wrong. What about you?
Well, I think that’s exactly right. So, just like many advisors approach referrals, generally, I boil it down to the difference between marketing and sales. And many advisors approach referrals from a sales standpoint, which is, “I want to do a transaction. I want to ask and then they’ll give me, and then that’ll work.” And that’s not how it happens and that’s not why it happens.
Yeah. Going back a while now, we did some qualitative research where we interviewed a range of COIs. I mean, accountants and lawyers primarily, we weren’t trying to expand the scope. And really looked at what they were looking for and what got in the way. And I think what you mentioned certainly is one of the top issues. They are risk averse and they’re risk averse for a reason.
Right. Exactly.
Like that it’s not, and anything that smacks of salesy is problematic. So, I think we have to accept that. The two comments that I think were most common were that you mentioned relationships and I think it was a version of that, that trust takes time, you don’t call me and next week I’m going to refer to you. It’s a relationship. And we need to get to know one another and it takes time. And this is a long-term strategy. And the feeling was that not every advisor took that time.
Right. And that’s one way that you can demonstrate your fiduciary approach is one way that I’m really fond of that advisors can pursue is to, when they talk with a center of influence, to say something to the effect of, “When we do our business, when we create recommendations for our clients, we often find that we need to pull in other professionals to help them implement some of those things, whether it’s writing a will or preparing their tax return or those kinds of things. So we always want to make sure that we have a good, current, vetted list of people that we can recommend. So would you be willing to get together for a little bit to tell me what you do and what you do really well, and the people they specifically do it for? So that if it makes sense to put you on that list, I’ll know what context to do it. And so when I meet the right person, we have a need for that. I’ll know when it’s the right time to recommend that they talk with you.”
So, I mean, are there other ways you think that you can reduce the risk that they’re feeling?
Well, part of it is, is it needs to go beyond the investments, because if it’s just the investments, then that’s a humongous risk. I mean, if a center of influence refer somebody to you and we have a bad market and the client gets angry that their portfolio went down, well, then now they’re going to be angry at the guy who referred them to you. So, that’s a huge risk. So one way of doing that is making sure that you’re taking it beyond the portfolio and doing a broader kind of client experience and providing real value from other kinds of advice and planning and those things.
Well, you put me in mind of the interview we did some time ago with Evelyn Zohlen as well. Who’s one of those rare advisers who gets the majority, I still believe, of her business through COIs. And we should probably link to that because, I think that it’s a similar message where she’s telling people, “These are the problems that I can solve. Think of me when this problem comes up.” Not, “I do everything. If you happen to meet someone who needs wealth management or something equally vague, give me a call.”
Yeah. I refer to her all the time. Because she has, if you, as an advisor can take your business to where she has, and I remember it clearly because I repeat what she said so often, which is, “I don’t want all your clients, but if you have a woman who’s in this situation, we’re your firm.” And then she can prove to them why and that’s extremely powerful.
Yeah. Yeah, absolutely. I think about one of the simple tactics that we’ve often worked with advisors on to figure out what this network should look like is to put the simple hub and spoke. Put the client at the center, get the spokes going and figure out all the different professionals in their lives. And these are all potential centers of influence and helps think about the network. And in that example, the client is at the center. But I think often what we think about with this is the advisor is at the center, the advisor is quarterback for the clients, and is bringing to the situation all of these different professionals. Do you think that helps or hinders the communication?
Yeah. Well, I think it hinders. Now, an advisor may believe that they’re the quarterback of the team and there may be good reason for the advisor to be the quarterback, that the attorney does something specific and the accountant does something specific and each of the other advisors does something specific. And then the advisor can be there as a financial planner to sort of coordinate all those efforts. But if you’re presenting that to those COIs, the idea that you should be quarterback is probably going to be news to them.
Yeah. I’ve seen similar research and we’ve done. It’s been a while since we’ve looked at it, but really it’s that trusted advisor. And similarly, I’ve seen many financial advisors who rightly play that role. But if you just ask blind, yeah. I think you’re right. Like why would you put yourself in that position? And in fairness, it’s contrary to what is really true anyway, the client is at the center, you’re all revolving around them.
Right. Well, and it’s important too, because what’s more important than positioning yourself as the leader of the team is to be a good team player. And so, some of the things that advisors can do to increase trust with those centers of influence is to figure out how they can facilitate the other people getting their goals accomplished in regard to the client.
How do I make your world easier?
Exactly. So that could be things like before the tax season… And here’s a tip for everybody. If you don’t have relationships with all of the other advisors that work for your clients, that’s the low-hanging fruit. So, if there are attorneys or accountants that work with your advisors that you don’t know, those should be the first phone calls. Because that’s easy, we share a client.
Yeah, exactly. And in that vein, treating COIs in the same way you would your other clients. So, look for content that is valuable to them, share information. I mean, they have many of the same objectives. They work with large number of clients. They’re thinking about engagement and experience. So much of what we come across in this industry would be absolutely valuable. I’ve worked with advisors who have had sort of breakfast working groups with a bunch of professionals where they just talk about, “What’s going on with client communications?” They’re just facilitating, but they’re adding so much value to that process.
Interesting. Oh, that’s great.
“When you refer your clients to us, what happened?” So it’s really like treating them like they’re a client, because to some extent they are.
Yeah. And then that includes including them on all the communications that you send out to clients. So for example, I still practice, I have clients and we’ve talked about AdvisorStream, we’ve had Kevin on the show and so we’re a subscriber to AdvisorStream, and I include all the centers of influence in that. And so there are times when I’ll go out with a client to see the attorney, and I’ve had the experience of the attorney saying, “Hey, thanks for sending me those newsletters. Those articles are really interesting.” And it’s a great opportunity to start a conversation, because then I can respond with, “Hey, listen, if you know that there’s something happening in the law that would affect people like our mutual client here, let me know, because we’ll keep our eyes out for articles like that and include them or… We might even interview you for that and broadcast that to everybody if they need to know that.”
So, you’re talking about broad communications, not because, I mean, as you started talking about that, I was going, “Privacy issues, privacy issues.” But not specific client information, but more broadly, this is what we’re doing and can you help us out?
So, for example, at the beginning of the pandemic, we had a big push on making sure that you have your estate documents in order, because if a lot of people are going to be getting sick, then we want to make sure everybody has a current healthcare proxy and power of attorney and those kinds of things. But in New York state, where I am, there were all kinds of rules that constrained that, that you had to have an in-person witness and you had to have a notarization, and you had to have all kinds of things, which was difficult when you weren’t allowed to get out and see people.
Right. And there were opportunities to promote them as well in soft ways. I mean, we can, if we have our list of people that we’ve vetted and it comes up in conversation, then obviously recommending them is one of the best ways to get the reciprocal referral. But I remember you talking about maybe some creative ways to include them in your content and that kind of thing. Can you talk about that?
So on our blog, well, for example, we interviewed in a estate attorney about some of how those rules had been relaxed and changed. And so we’re not the experts at that. So we didn’t write about that ourselves. We brought in an attorney who could talk a little bit about it. And so we interviewed him about that. And, we can solicit articles from centers of influence about their area of expertise. And we can put that into our client communication, let everybody know, because it’s a useful piece of information, but it also helps promote them as well and get their name out.
It does, one of the things that we’ve often recommended along those lines is if you’re doing a client event, even if it’s a small client event, set the table, think of who you want at that table. And ideally it’s your great clients, a couple of prospects, and that’s the opportunity to have a COI involved as well. So have them part of those events that you’re running, encourage them to invite their own clients if it’s of interest, but they’re there, they’re interacting. And they’re part of the conversation with your clients.
Yeah. Well, and if you’ve got a good enough relationship with the center of influence, what you just mentioned can be a really powerful way of doing that, which is to have a joint event. So, we’re going to get together, we’re going to talk about this particular topic. And Jane attorney is going to talk about the legal aspects of it. And then I’m going to talk about the financial aspects of it. And we’re both going to invite all of our clients to it. So, my clients who don’t have an attorney will be exposed to Jane and Jane’s clients who don’t have a financial advisor can be exposed to me. And that can be a very powerful thing.
Well, I mean, to that end, we often recommend when clients do feedback, that they create a summary of the results and share it with their centers of influence, because it’s quantitative.
Right. That’s great. That’s great.
This what we’ve done. I’d love to share something that I think, if I think back, has been the most successful COI activity generating thing that we’ve ever done, we did this a few times. I’m going to start with our experience on the feedback side. So, let me paint it as a single example. We have an advisor who has a very close relationship with an accountant. So we do feedback with accountants as well as advisors. And each of them does a client survey. So the results are completely confidential. They’re asking about their own world. It’s relevant to each of them.
Interesting.
… a financial plan. It’s quite amazing. And then, we had one advisor who took that one step further. They asked about topics. We always do this. What topics are you interested in? They both asked about it. And then, let me bring it back to the point you made, they did a joint event. So again, now you don’t have to share information, but you can legitimately say, “Our clients told us they were interested in X and we’re going to run a joint event with this advisor.” And now, boom, you’ve got all of those people in the room. So, it’s so much of this comes down to just being really intentional about the strategy, not just hoping it all works. There’s a lot of thought and strategy that goes into that.
Well, and doing something, having a strategy that can help you get introduced to people and not just waiting for the other person to introduce you to people. So like a joint event like that is a perfect example of that. That’s a way where the attorney or the accountant doesn’t have to put their neck on the line to make an individual introduction. They can bring them to an educational seminar where there’s value and they learn something and they get something beneficial. And if they want to pick up a conversation with the advisor after that, great, that’s their choice. So, it’s a whole different level of risk that the COI is taking on.
It really is. And I think we have to be careful that, going back to your first comments on relationship, this doesn’t mean that we say, “Well, I have relationships with 10 COIs. So I’m going to ask them all to do joint events with me.” And there’s probably one or two where you’ve built that relationship and you’ve built that trust. And this isn’t something you pitch, you need to be as sure about them as they are about you and then limit it. But just working with one or two, you get a lot out of that.
Right. Right. So, in summary, where this often goes wrong, if I’m hearing you correctly, where this often goes wrong for advisors is that they take it from a transactional standpoint. They figure they can just ask and that they will receive. And that it’s really about a relationship and that there are different ways of building that relationship. That is, working together as a team, appreciating their concerns and their risks and their perspective on the whole thing. Being able to show a center of influence that you have a specific way, a specific plan for solving a specific set of problems that some of their clients may be experiencing. And then looking to actively put together things that can help bring people together and reduce the level of work that a center of influence would have to do for you to get to meet some of their clients. What did I miss in that list as I was [crosstalk 00:28:00]?
No, I mean, that’s a great summary. As you talk, it’s saying, have a COI experience in the same way you have a client experience.
Oh, that’s interesting way of looking at it, yeah.
… like take it that seriously. But I think if an advisor can just do some of those things, it will change the impact and the results that they see.
Yep. I agree. Well, we hope that there are some tips in here that you all can use and get more referrals from centers of influence. And we will be talking with you again very soon.
Take care.
Hey, folks, Steve again, thanks for joining us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes. It really helps. You can get all the links, show notes and other tidbits from these episodes at becomingreferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth and connect with our blogs and other resources. So, until next time. So long.