Forming mutually beneficial referral relationships

Sealing the deal with a referral partner is an art and a valuable asset for an adviser to have.

Do you have a dentist that you've been going to for years? Or a doctor – one that your whole family now use?

Now ask yourself how you found them. Chances are a friend or someone you respect told you about them.

Referrals are a great way of finding the perfect person to meet your needs and building a long-standing relationship with them. And there's something about referrals that add that extra element of trust.

The same is true in the business world and especially for advisers. Forming a referral relationship with another professional such as an accountant, lawyer or mortgage broker, is a great way to deliver a higher standard of service to your clients, as well as to attract new business. So how do you go about putting these referral relationships in place?

Well, hold on. Before you start knocking on doors and telling people how great you could both be together if you just give it a try, think about what you want from the relationship and whether you can deliver value to the other party When selecting and approaching a referral partner you need to be confident in their professionalism and integrity. Research their reputation, drawing heavily on word of mouth feedback from their existing clients. Be aware that any negative experience that your clients have with this partner could damage your own reputation and business.


You need to share similar values with the referrer and there needs to be mutual respect. Everyone also needs to be clear about the role each has and how the clients benefit.

If you don't want to be sent packing for not pulling your weight, here are five relationship fixers:

1. Remember the end game 

And what's this? Your clients' needs of course. Before you reach out to others, think about how your clients are going to feel. Don't just start referring them to an accountant because you think the accountant will start referring their clients to you. Developing a referral arrangement is a slow process that requires you being able to offer a solution to a centre of influence's clients and vice versa. If your referrer finds you're not really interested in understanding their business, they won't be sending any clients your way.

2. Show them what you've got 

A referral arrangement needs to be mutually beneficial, so identify a financial need that isn't being met by the centre of influence. You might know a law firm that has an issue with developing a succession planning strategy. Maybe offer to do it for them pro-bono so they can see how you work.

This way, the centre of influence gets a chance to see what it's like to get advice from the adviser. The need could also be around insurance advice or a transition-to-retirement strategy.

3. Let your happy clients take the lead

While cold calling another professional is one way to develop referral relationships, advisers are far more likely to be successful if there is a 'warm' introduction, which involves a referral from an existing client.

If you have a happy client, ask them for a referral to their accountant, for example. That's easier than sending off 30 letters to random accountants.

4. Take it to the man (or woman)

When you're developing a financial plan for your clients, suggest running it past their solicitor or accountant to make sure it fits with their view of what their client should be doing.

This is an innocuous way to get in front of a client's accountant, who then might see commonality with some of their other clients and refer them to the adviser.

5. Do the dishes 

Well, maybe not literally. But it's the everyday nurturing of the relationship that's going to reassure and build trust with your referral partner. Viewing these relationships as something you can 'set and forget' is the quickest way for it to fail. Maintain regular contact with your referrers. Perhaps have a lunch and invite your mutual clients. It's a big decision for a professional to refer clients to other professionals, so give the relationship the respect it deserves.

And while you're investigating referral relationships, don't limit yourself to traditional centres of influence. Consider other professionals your client may interact with, such as life coaches, teachers or business owners in your local area. An open mind can open the door to many new opportunities.

But whatever you do, don't waste each other's time. A key complaint among accountants is that they refer clients to advisers and never hear from them again. Why would an accountant, who has built up a trusted relationship with a client, keep on referring them to someone that can't even pick up the phone and say thanks. Keep those lines of communication open or you'll find the relationship becomes a relationship in name only.


Eric Blewitt is the general manager of CommSec Adviser Services

This article recently featured in Risk Adviser's sister publication ifa. 

Forming mutually beneficial referral relationships
Eric Blewitt
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