Julie Littlechild and Steve Wershing on Referrals from Centers of Influence

Show Timeline:

1:48 Why many advisors say they aren’t generating more referrals from centers of influence
6:11 Adapting your approach by building partnerships with COIs
12:01 The impact of ‘being a team player’ and helping your partners reach their goals
19:49 Creative ways to partner with COIs and generate more introductions
25:41 Understanding the importance of shifting from referrals to introductions

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Stephen Wershing:
Website: https://clientdrivenpractice.com
LinkedIn: https://www.linkedin.com/in/stephenwershing/
Twitter: @swershing 

Julie Littlechild:
Website: www.absoluteengagement.com/blog
LinkedIn: https://www.linkedin.com/in/julielittlechild/
Twitter: @jlittlechild 

Episode Transcript:

Julie Littlechild:
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.

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:
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?

Julie Littlechild:
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?

Steve Wershing:
Right. Exactly.

Julie Littlechild:
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.”

Steve Wershing:
Right, right. Sure. Yeah, that’s extreme. But yeah, I get it.

Julie Littlechild:
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?

Steve Wershing:
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.

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:
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.

Steve Wershing:
Right. Exactly.

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