When many financial advisors think of forming a strategic alliance with another professional, they consider CPAs or maybe estate planning attorneys. These are great professionals to partner with, as their client base generally includes individuals who would match your ideal client profile. But they can also be difficult to partner with, as so many advisors want to do the same. If you’re looking to grow your firm through a business partnership, are there other centers of influence (COIs) you might consider? Certainly, and they are easier to find than you may think.
Examining Your Business for COIs
A COI is someone who can have a positive impact on your business by providing introductions to new potential clients, networking opportunities, and word of mouth. Rather than spending your time and energy chasing CPAs—a group known to be cautious and reluctant to give referrals—stop and ask yourself this: Based on my business and the clients I’m trying to attract, who else could make a good COI for me?
Say you want to attract more widows to your practice. Certainly, CPAs and attorneys could be useful in helping to develop this niche. But if you think about the needs of widows specifically, you’ll start to see other opportunities, including:
• Funeral home directors: They are the first to know when there’s a death in the family and can serve as a useful contact with extended families.
• Support group leaders: Many churches and hospitals offer support groups for widows and widowers.
• Clergy: Often called on to help the recently bereaved, clergy play an important role at this stressful time in someone’s life.
• Librarians/book clubs: Many women join book clubs for social reasons in addition to finding good books to read, and librarians frequently suggest books to clubs in town.
• Local organizations: There might be organizations in your area that tend to skew heavily toward older women, such as garden clubs or historical societies.
As you can see, there are many professionals who could be great sources of referrals. And that’s the point! If you think about COIs more broadly, you might be surprised to find that you have a large pool to network with right in front of you.
Who else could make a good COI? Think about your ideal clients and then look through the list to see which of them might make great COIs. Use this as a starting point, and you’re likely to come up with some great options:
• High-end realtors
• Mortgage brokers
• Concierge physicians
• Jewelers
• Restaurant owners
• Football coaches
• Gym owners
• Police or fire chiefs
• Editors of local publications
• Chamber of Commerce officials
• Wedding planners and photographers
• Caterers
Keep in mind that these COIs are likely to be much less tapped out than CPAs and perhaps more open to learning about how you help people. Still, you want to ensure that your relationship starts off on the right foot, so here are some tips to get you started.
4 Tips for Working with COIs
1) Approach COIs like you would a high-net-worth client. While getting to know someone socially is a good idea, it usually takes both time and expertise to actually win the business. Too often, I hear that when advisors take a potential COI to lunch, they don’t bring any professional documents, as their goal is for the individual to “just get to know me” or “see me as a nice person.” It shouldn’t be a surprise, then, that careful, cautious, analytical CPAs in particular don’t go back to the office and start referring clients to the advisor.
Instead, here's how you could approach a meeting with a potential COI:
• Bring a statement of expertise about your firm.
• Include biographies of you and the team (if any), along with bullet points of your process.
• Clearly and simply detail what you do and how you help people.
• If you have supporting information, such as case studies, articles or awards, or a sample of your work (e.g., a financial plan), bring those along, too.
• Be prepared for questions—in fact, welcome them, as they are a sign that someone is interested.
2) Learn all you can about the COIs. Who are their families? Do they have pets? What schools did they attend? What are their hobbies and community involvement? You’ll uncover a lot of valuable information in the course of conversation, and they’ll learn a lot about you, too.
Next, try to get the conversation started with a topic that the COI would want to talk about and be easily able to discuss. For example:
• Tell me about your practice (or business).
• Can you describe your typical client? Your ideal client?
• How do you see your practice evolving?
• What types of cases or clients would be best suited for your practice?
• Are you active in any professional associations?
3) Involve your clients. Ask who their tax or other professional advisors are and suggest that you all meet for coffee. The professional is likely to accept the invitation when it comes from your client, and you now have some common ground—as well as an advocate for you at the table.
When you meet this professional, come prepared with an idea for solving an issue that you know your client faces. A simple discussion about the best way to approach a tax issue, for example, will allow everyone to engage in the conversation, and your client will likely be pleased at the extra effort to save him or her on taxes. Also, be sure to try to turn your COIs into clients of your firm; they will then fully understand your process and differentiation and be able to feel good referring others to you.
4) Be clear on your value. You offer many services that can benefit clients, and most of them are separate and distinct from what the COI offers. What are the particular pain points for your COIs? If you can identify where they need help, you will be better able to position your services effectively.
Expanding Your COI Pool
At Commonwealth, I work with advisors to help them grow their businesses in the way they want to grow. And there’s one thing I know for sure: there are many different ways to be successful. The key is to find what works best for you and your practice. If you’ve already formed a great working relationship with a CPA or two, great. But if not, don’t beat yourself up. Instead, try to look at your practice in a different way. By expanding your COI pool beyond financial professionals, you may also come to know and understand your clients better, enabling you to fine-tune your work with them.
This post originally appeared on Commonwealth Independent Advisor, a blog authored by subject-matter experts at Commonwealth Financial Network®, the nation’s largest privately held independent broker/dealer–RIA. To subscribe, please visit http://blog.commonwealth.com/.
Kristine McManus is chief business development officer, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, an independent broker/dealer–RIA.
