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,
It’s that time of the year where we reassess relationships, segment our client activity and take a look at where we want to spend our energy in 2022. This year, the topic of centers of influence (COIs) has come up quite a bit.
We have 12 COIs across our team of four advisors to whom we regularly refer new opportunities. All are either attorneys or accountants and all are very competent at what they do. We’ve not had any problems with the referrals we’ve made and in fact clients often compliment us on the relationships we’ve developed and share their satisfaction with the work.
When we discussed the COIs last week, we shared frustrations around the lack of a reciprocal relationship in most cases (except one who refers quite often to us). We know these COIs and we’ve sent them new opportunities on a regular basis, but we don’t see any referrals come back to us.
Is this something you recommend we confront with the COI? One of our team members suggested we create an Excel spreadsheet showing the revenue we have generated for each COI and the amount we’ve received in return – which will be a big zero for 11 of the 12 relationships. Is this too dramatic? Is there a better way to understand why we are not being chosen for their clients’ needs for planning and investing?
E.V.
Dear E.V.,
This is a refrain I hear from my advisor clients quite often. I do workshops on this one topic because the dynamics are too frequently misunderstood by advisors. I’ll do my best to sum up in a short space the fundamental things I’d ask you to consider.
To answer your question directly, do not construct an Excel spreadsheet to show your COIs in black and white how much they are making from the relationship in contrast to you. You’ve outlined that your clients have appreciated the referral to these COIs; they have complimented you. The referrals you made have brought revenue to the COI.
But let’s agree that you made these referrals because a client needed something. You want to be a full-service advisor, so you helped them. This might sound like a nuance, but it is an important one. You referred because of a need you had, not because you wanted to help the COI.
Let this sink in – it is the fundamental mistake most advisors make when considering COI relationships. You refer because there is a need and your client will benefit. So does any COI. If you haven’t taught COIs well enough about what you do, who you do it for and why it is helpful – i.e., outcomes their client will receive, they aren’t going to find the opportunities very often, if at all.
When I do branding work for my advisor clients, I often ask to speak to their clients or COIs. If there is one refrain I’ve heard hundreds of times doing these interviews with COIs, it is that advisors all look the same. Even COIs who have worked with an advisor and “know” them tell me they can’t articulate the difference between one advisor and another.
Think about the importance of this.
If your COI doesn’t know what makes you unique and isn’t armed with a way to talk about your firm in a differentiated fashion with their clients, are they going to take a risk and have that conversation?
Make sure your COIs know what you do, how you do it, why it is beneficial and how to talk about it.
The next point is the relationship. You have four advisors referring to 12 COIs. That is a very good ratio. I recommend having three to five core relationships for each advisor. I’m not sure what you are doing besides referring to the accountants and attorneys you have in your circle, but be sure you are considering them as a long-term prospect. I call it the ”eternal prospect” because they stay in your pipeline for ever as you wait for the next referral to come along. This means you have to treat them as a prospect. Find ways to connect with them on a regular basis, send them updated information, call and inquire about their business and ask where you can help, be an educational resource, invite them to events, host a coffee at your office.
Treat this as an ongoing, evolving and ever-changing relationship. Don’t assume that one cup of coffee, referral, or invite to an event deepens the connection. You want to find something every month or more frequently, depending on the nature of the relationship where you provide value, insight and contact that isn’t just about asking who they know that you can work with.
Be sure you have picked the right 12 COIs. I’ve seen many times where advisors connect themselves to a highly successful COI who is either on the cusp of retirement or isn’t interested in building their own business because they are already so successful. Some aren’t capable of finding and closing new business because of their own limitations. Partner with COIs who are thriving, care about growth and are pushing themselves to find new opportunities. If you identify this with a COI, then you can have more open discussions about how to grow together. Find ways to hold joint events or partner in meetings with clients to discuss one another’s businesses. Know the status of the COI’s firm and their personal objectives. If they don’t care, nothing you can show them or do is going to make them care.
Qualify COIs as prospects. You wouldn’t waste your time with a prospect who is never going to hire you by spending hours putting together proposals and giving them free information. Consider your COIs in a similar fashion. You only have so many hours in the day and you have to spend those hours judiciously and focus on those relationships that are mutually beneficial and not one-sided.
You are doing the right thing by reviewing your year and considering what will happen in 2022. I applaud your diligence in planning. Put some of these ideas into the discussion with your advisors and see which COIs you want to keep and where you need to refocus your attention. Consider whether all 12 belong on the list or whether it is time to search out new relationships that are more complementary to your efforts.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. The firm also founded and manages the Advisors Sales Academy. She is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. 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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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 
