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If Your Referral Network Isn’t Working, Check Your Connections

Bridging the gap among different types of advisors.

It’s axiomatic. When you write articles for life insurance agents, estate planners, tax advisors, trustees, investment advisors and financial planners, you might hear from some of them. And, I have. From across the spectrum of advisors, I hear a common theme, often expressed with frustration that borders on bewilderment. “Why aren’t other advisors bringing us in on cases? Why aren’t they introducing our products and services to their clients? Why don’t they get it? What can we do about it?”

These advisors might find it helpful to work through the self-diagnostic set of questions I’ll pose in a moment. But first, let’s set the stage.

Communicating, but Not Connecting

I interact with advisors from across the disciplines. So, when I hear one advisor voice concerns about another type of advisor, I naturally conjure up the response of the “party of the second part.” For example, I hear from life insurance agents, frustrated with estate planners who, despite all the networking and collaboration on cases, don’t refer clients to them. And, even if they do, they only bring them in to address the liquidity needs determined by the estate planners without the input of the agents. The agents aren’t brought in earlier to address the full range of needs the clients might have for insurance. As those agents speak, I hear the estate planners counter with “Most of our clients already have agents.” Or, “We do the planning and then call in an agent for any remaining liquidity need. That’s the role of life insurance, right?” I’ll leave the agents’ retort to your imagination.

On the flip side, I hear estate planners complain that they don’t have a crowd control problem from agents’ referrals. And they themselves are only brought in for estate plans well after the agent has determined the insurance need and put that process in motion. To which the agents respond, “Please see the above…”

As I listen closely to what each side says and how they say it, it’s clear that neither is giving the other the foundational basis they need to confidently bring the other in on cases, let alone in a comprehensive and timely manner. They’re communicating, but they’re not connecting. 

The same goes for the life settlement business. Some life settlement providers are stumped as to why advisors, writ large, don’t introduce the transaction and them, to their clients. But those advisors tell me that the life settlement providers won’t move on from the “why” to do a life settlement to the “how,” which would include the advisor’s role in the transaction and address the advisor’s concerns.

And the trust business? Some trustees wonder why they aren’t getting traction with certain estate planners, meaning the estate planners who aren’t also in the trust business. As I listen to these trustees, I think of the estate planners who indeed balk at making recommendations, though given the risks of referrals, I can understand that. But they also don’t have much to say about what their clients should ask trustees when they interview them. That, I don’t understand. When I tell trustees what I hear or don’t hear, they’re puzzled. But when I hear how trustees answer the questions you’ll see below, it’s anything but puzzling.

What’s the root cause of this problem, this lack of real connectivity? It’s poor communication, meaning the kind of nuanced, tailored messaging that speaks directly to the needs, expectations and concerns of the other types of advisors. So, here’s a suggested set of questions that advisors can use to check their connections.

Advance Prep

Before starting this exercise, advisors should look at my article “Getting Through a Gatekeeper to Your Potential Client.” The guidelines for dealing with internal gatekeepers apply here as well. My articles on networking, on interviewing estate planners, trustees and investment advisors and on working collaboratively on planning projects should also be helpful.

A second step of advanced prep is for you, the advisor who’s going to run through these questions, to jot down the names of some advisors in various disciplines with whom you’re having trouble connecting, noting the type of advisor each is, the market they’re in and the challenges they face in that market and the context in which such an advisor would typically see the need for your services. Ask yourself, “If I were this type of advisor, what would I need to know about someone in my business before I take the risk of making a referral?” Dig in on this one, because banalities like “They’re looking for a qualified professional who’ll do a good job for their clients” aren’t cutting it. They’re looking for a lot more than that!

The Questions

Feel free to tweak both the wording and sequencing of the questions to align with the type of advisor you are and the type of advisor you’re trying to cultivate. Yes, there’s a little redundancy in here, but that’s very purposeful. I read somewhere that reiteration can be the source of illumination.

  • Start with the advisors you identified, one at a time. How do you think each would describe what you do and the value you add? What would they get right and wrong? What critical elements would they fail to mention altogether and, just for now, why not? Of course, if you’re affiliated with an organization that’s a prominent part of your service offering, build that into the question.
  • Virtually every advisor tells clients that “We work with your other advisors.” What does that mean, really? Assume you’re sitting across from another type of advisor who says “Tell me exactly how you work with someone like me on a case. Walk me through your process, your communication and the resources you bring to bear on a case that might be of interest to me. What am I going to hear that I haven’t heard before?”
  • Why will their clients benefit from working with you versus a competitor?
  • How will this advisor benefit from working with you? This question continues to push you beyond the value of your product or service itself to describe how you work with other advisors and why they’ll be better off for the experience. You should be able to describe in real terms how an advisor who interacts with you will be able to expand their services to clients, improve their marketing or whatever. The point is, don’t just talk about the principle of the thing. Talk about the money, meaning the increased chargeable time, practice efficiencies and so forth.
  • Even if they understand your business and value proposition, do they know when and how to engage you? This is why it’s important to identify advisors from different disciplines and be cognizant of the context in which each should recognize the opportunities to bring you in.
  • Do they know how an engagement with you is supposed to work, what their role is, what their reward is and, of course, what their risk is and how you mitigate that risk? Here I specifically harken back to the gatekeeper article. I will also note that the advisors who are most “bewildered” are the ones who simply can’t or won’t answer this question. Why? Because they don’t have a process to describe.
  • If they do know and appreciate all that they should but still aren’t engaging you, why not? Is it your product or service, or is it you?

Get Feedback

Now, ask a seasoned, trusted colleague (but not someone who reports to you) to listen to the elevator or other introductory speech you make to each type of advisor. If you don’t have a version for each type of advisor, then you’ve identified part of the problem right there. Your colleague should listen for two things. One is content, meaning what you cover and whether it conveys a meaningful message in light of what you think the particular advisors don’t get. The other is context, meaning how well you tailor the presentation to the type of advisor you’re presenting to. Then ask for feedback, giving your colleague the license and bandwidth to candidly tell you what you hit and miss in your presentation. If you don’t have such a colleague, maybe do this exercise with your study group.

That’s it. The ideal outcome of this exercise is to help the advisor make a strategic assessment of and action plan for the core problems with their connectivity.

Fewer Reciprocal Referrals

Though a topic for another day, I hear more and more advisors voice concern about a problem every bit as pernicious as connectivity. They’re concerned that the pool of traditional sources of reciprocal referrals is drying up. Why? Because many traditionally “single discipline” advisors are branching out into other areas, whether by forming life insurance, investment or trust subsidiaries or creating alliances. The point is that these traditional reciprocal referral sources are now trying to keep the business in-house. Again, that’s a topic for another day.

Charles L. Ratner is a commentator on life insurance and estate planning based in Cleveland, Ohio.

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