Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
We have a number of strategic alliances with estate attorneys and CPAs to whom we often refer business. We offer very robust planning to our clients and rather than have these additional capabilities in-house, we prefer to outsource. It’s increasingly frustrating, however, because we provide a steady flow to these connections, but they do not refer in kind. My partner suggests we cut them off entirely. I think we should clarify that we will continue to refer if they do likewise but will cease doing business with them if they do not. Is there a formula that works best?
Peter P.
Dear Peter,
Every strategic alliance is unique, so I wouldn’t use the word “formula” when talking about these relationships. Some questions to ask yourself that might help you and your partner decide which route is best for you:
Do the strategic alliances know that you hope they will refer to you? You may think this is obvious and implicit. However, I have personally talked to hundreds of alliances with advisor clients and found that often times they do not realize the advisor expects something in return!
Do the strategic alliances know enough about your business, who you work with and what you offer to make a referral? Again, you are sending clients their way so you could assume they have some picture of what you do, but one lesson here is to never assume. They need your help in identifying the right client and the right situation. Be sure you educate them effectively.
Do you have an ongoing relationship with them and treat them like you would a valuable prospect? This could include sending articles of interest, inviting them to an event at your office, taking them out to coffee once a quarter to learn more about their business or other relationship-building activities.
Do you check in on clients you have referred to ask whether they were a good fit and to seek information about the kind of client that is a best fit for their firm? It’s important to show interest in what they do, how they do it and not just to assume that because you sent someone they are happy with the referral!
Try approaching them differently and thinking of them more like a valued prospect and relationship rather than one who “owes you” and see if the situation changes.
Dear Bev,
We are updating the old look of our office to create a more modern, bright and colorful space. Several of our advisors believe we are betraying our roots and seeking only to attract younger, more entrepreneurial people. I believe that the aesthetics of our office say a lot about who we are and “stodgy” is not a good look for us. Does this move tell our older clients we are abandoning them or is it a positive shift to change with the times?
Stephen G
Dear Stephen,
Remember that for most people “change” is not initially good. So, your older clients might wonder why you are doing something so dramatically different and might subconsciously or overtly resist it. This doesn’t mean you shouldn’t do it; it just means you should be careful about messaging it. You should show clients you are still the same firm they have come to know and trust, but with a face-lift!
Aesthetics do matter. Most psychological research tells us it can take under a minute for someone to make a first impression (I call it “assumption”) about us based on how we look, speak and act. Unfortunately human beings make snap judgments on things and often don’t take the time to understand what’s underneath.
To help control these snap judgments, make sure you put a communication campaign in place to tell clients why you are making the change. Think about how this change will benefit clients. Will it bring “new” and fresh ideas? Will it align your look with your existing beliefs? Will it make their younger family members feel more at home? Will your team find the new look more energizing and engaging? Whatever your rationale for doing it, frame it in a way that is positive for the clients and then communicate it to them.
Don’t ask them if they like it or not. This is often a recipe for disappointment. Because most people don’t like change, they will often react negatively at first. Let them get used to it and help them understand the reasons behind it.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. In 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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