The Push To Get Referrals From Accountants And Attorneys

By Russ Alan Prince and Arthur A. Bavelas

The open secret in the life insurance business is that lawyers and accountants are an optimal way to get large cases. Most producers know that a great way to get new wealthy clients is to have them referred by one of these professionals, who can be exceptional referral sources.

But there is also a real secret, and that is actually making this referral stream open up. The secret most producers do not know, but want to know, is how to start obtaining referrals from accountants and lawyers, and, more importantly, how to keep the flow of referrals going.

In this article we are going to explore the level of interest among life insurance producers in creating a sustainable referral stream from accountants and attorneys, and the effectiveness of institutional support.

Producer Motivation. Producers are strongly motivated to open up a new channel of referrals, and especially keen on developing strategic relationships with accountants and attorneys. In a study of 716 producers, 81.6% of them are “very” or “extremely” interested in garnering affluent client referrals from lawyers and accountants.

What is clear is that there are many producers who want to befriend lawyers and accountants in order to create a pipeline of new wealthy clients for their practice.

This interest is especially strong because other forms of new client generation are proving increasingly ineffective. Cold calling is not as viable as it once was. Seminars and workshops do not pull in new prospects the way they used to. Many of the tried-and-true ways of generating a new client flow do not work as well for producers these days. That explains the considerable interest in new referral sources like accountants and attorneys.

The Role of Institutions. Producers are not the only ones to sense the opportunity here. Financial institutions have also recognized the importance of lawyers and accountants as a referral source for their producers (see Exhibit 2). Not only are they aware of the opportunity, they have already created marketing programs for producers to use. In fact, nearly all the life insurance companies we examined (92.3%) already have developed a formal accountant and/or lawyer referral program for their producers. Just 7.7% do not have a program in place.

This is a significant institutional response. Creating a marketing support program takes a significant investment of time, expertise and financial resources. The broad participation of institutions in developing attorney and accountant referral programs signifies a general industry consensus on their strategic importance.

However, the existence of these programs does not mean they are excellent. In fact, the consensus among life insurance producers is that the marketing programs for developing referrals among accountants and attorneys are flawed.

The problem with the referral programs of the life insurance companies is that only 17.1% of their producers consider them to be very useful (see Exhibit 3), while 82.9% say they are not very useful at all.

This is a significant finding for carriers. In spite of the investment in developing these programs, producers do not find them effective tools in the field.

There are many reasons for the lack of success so many producers have with the professional referral programs provided to them by the life insurance companies.

Some of these problems have to do with the nature of the programs themselves. In our examination of a variety of programs, we found many of them to be derivative of each other. That is, they advocate the same approaches and provide basically the same tools (although many have components that could be very helpful to a motivated producer).

Another problem we uncovered is that many of them take a one-size-fits-all approach, rather than customizing the program to the practice of the individual producer.

Not all the problems are with the program. Part of the problem has to with the producers themselves. In particular, we are referring to the tendency for a number of producers not to put in the requisite effort to make the program work for them. Garnering a steady stream of affluent client referrals from lawyers and accountants is hard work. There are producers who are not willing to put in the effort it takes, even when the tools are given to them.

In spite of the institutional and producer problems with formal programs, it is worth pointing out that some have great merit. Some are extremely effective in providing producers with tools and resources that are put to use and produce results.

Regardless of whether the problem is on the institutional side or the producer side, the situation still is the same. Many of the methods of prospecting–especially for wealthier clients–are becoming dramatically less effective. Producers and the life insurance companies they represent need to find more effective prospecting methods. Of these more effective methods, attorney and accountant referrals remain very promising.

Producers who want the wealthier clients of lawyers and accountants, therefore, need to evaluate how the various life insurance companies can support them in creating strong strategic relationships with these professionals.

It is not only their primary carriers that producers should look to. They should also consider capitalizing on all the relationships they have with financial institutions including brokerage operations, investment companies and other life insurance companies.

Russ Alan Prince, right, is principal of Prince & Associates, a research and consulting firm in Shelton, Conn. He can be reached via e-mail at princeasoc@aol.com. Arthur Bavelas, left, is president and CEO of Resource Network LTD, Radnor, Pa. He can be reached at aabavelas@aol.com.


Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.