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Teaming With Other Advisors

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Producers often need to win over the small business owners accountant and attorney

By Warren S. Hersch

As often as not, the small business insurance and financial advisor has two audiences to win over: (1) the business owner; and (2) other advisors, typically an accountant and attorney, with whom the financial advisor has had no pre-existing relationship.

Gaining the respect and cooperation of these other professionals, say experts, should not be all that difficult a task, so long as the advisor projects professionalism, demonstrates the technical expertise needed to meet the clients objectives and, not least, can serve effectively on a team.

One measure of professionalism is the advisors choice of words. Stan Hustad, a marketing performance coach and president of PTP Group, Minneapolis, Minn., tells advisors to employ terms that underscore their financial planning skills and expertise.

Examples: Insurance agency becomes firm or insurance consulting firm; fellow employees are referred to as colleagues and associates, rather than agents; compensation substitutes for commission when describing how one is paid.

And anything else having to do with sales is banished from view.

“I encourage my clients to take down all of their sales awards,” says Hustad. “Their [office] walls should be full, rather, of certificates, diplomas, community awardsthings that distinguish them and signify that theyre professionals.”

Thats sound advice not only when it comes to visiting clients. Jim Bloom, a senior financial planner for MetLife, New York, says its a good practice to invite attorneys and accountants to the office to see your professional surroundings and establish a working rapport.

Yet, the question arises: Do fee-based advisors wield an advantage over those who earn only a commission, however much the latter might cloak their position under the mantle of professionalism? Observers say the edge, if any, is slight. Though fee-based advisors generally enjoy easier entr?e to the team, how the accountant and CPA view them ultimately hinges on their expertise.

“Being fee-based helps to open doors,” says Michael Brink, an insurance advisor with Nease, Lagana, Eden & Culley, Atlanta, Ga. “But once youre in, you quickly must demonstrate your knowledge and professionalism.”

Ann Hartmann, past president of the Society of Financial Services Professionals and a financial planner at Lincoln Financial Advisors, Fort Wayne, Ind., agrees. “The real issue is what you know and what you can bring to the table,” she says. “If youre just pushing product, then youre only going to get grief from the other advisors.”

The more that other team members value the financial advisors expertise, adds Hartmann, the less adverserial will be their product-focused inquiries. Rather than call into question a product recommendation or price, theyll seek to elicit information. What does the product do? How does it meet the clients needs? Why is it superior to other solutions?

A strong recommendation from the client, and equally strong credentials, will aid advisors in winning the respect of other team members early in the planning process, observers say. On both counts, continuing education, and the amassing of recognized industry designationsCLU, ChFC, CFP, etc.are key.

Sometimes, however, the challenge is less about establishing ones credentials than about alerting the client to the subpar expertise of others on the team. This frequently happens, say business planners, in situations where the client started the business using generalists but then failed to replace or augment the team with specialists as the business expanded and its planning needs became more complex.

“If the other advisors are very good, then Ill usually consult with them during the fact-finding period,” says Hartmann. “But when the client is working with a bunch of non-specialists, thats when its time to say: Look, these are awfully nice people, but I think your needs have changed.”

Brink notes the overuse of generalists is most common in rural areas, where advisors knowledgeable about sophisticated estate and succession planning techniques can be hard to find. When specialists are present in small (and even mid-size) towns, word tends to spread quickly among locally based professionals, making the specialists efforts to establish a reputation and secure referrals easier than can be expected in larger cities.

Non-specialists, to be sure, need not always be jettisoned in cases requiring advanced planning techniques. Other factors to consider, Hartmann observes, are whether the generalist is prepared to act in the clients best interest and how long the advisor has had a relationship with the business owner.

But when there is a mismatch in expertise and one advisor is not prepared to defer to another, she adds, the client can expect conflicting recommendations and a breakdown in team consensus. Or planning slows as differences get resolvedand advisors who are out of their depth get educated.

This is assuming theyre open to instruction. Observers say that relations among accountants, attorneys and financial advisors frequently are characterized by professional gamesmanship, where each seeks to portray his or her business planning knowledge as superior to the others.

Tensions can heighten when one professional has expertise in anothers field. Thats increasingly common, says Brink, as more attorneys, CPAs and broker-dealers become licensed to sell insurance products.

“You have a real melting pot in the financial services industry,” says Brink. “If the team is to be effective, each advisor has to establish his or her area of expertise and not try to go beyond that. You gain credibility by pointing out what you know and acknowledging what you dont.”

The proliferation of insurance-selling professionals poses other challenges to team-building: knowing how and when to split commissions and, where necessary, encouraging colleagues to commit to full disclosure. Brink explains that a growing number of lawyers, and still more accountants, have established insurance practices on the side. And many expect a cut on the product sale.

Brink says he is amenable to dividing commissions on his own products with an insurance-licensed attorney or CPA who tapped him to join a case. When, however, team members represent themselves strictly as advisors but actually have a vested interest in the sale of a third-party product, then they must disclose this interest to the client.

When they fail to do so, and when they engage in ethical lapses, then team-building efforts inevitably come to naught. William ODonnell, president of William T. ODonnell Associates, Chicago, Ill., recalls one meeting where the client became irate at his financial consultants for not earlier mentioning ODonnells suggestion for reducing the clients taxable estate: selling the clients highly appreciated stock, then directing the proceeds into a charitable foundation.

“The consultants tripped over each other, first by advising against a sell-off, then by saying that any cash generated from a sale should be given to them to reinvestso they could make money for themselves” says ODonnell. “Each party on the team, with the exception of myself, was self-serving.

“I didnt have to point this out to the client,” adds ODonnell. “He fired them.”

If the advisor is fortunate enough to be part of an upstanding and competent team, then the issues are more straightforward: when to consult with fellow team members; how specific to make the plan; on which points to be flexible and when to bring conflicting advice to the clients attention.

Advisors can best manage areas of friction, observers say, by working collaboratively and building consensus with the accountant and attorney before presenting suggestions to the client. Even when team members cant agree on all points, the coordination will at least enable the advisors to best position their arguments when gathering with the business owner.

How much face-time the financial advisor gets with the owner may depend on whos quarterbacking the deal. Often, this is the professional who initiates contact with the clientbut not always. When playing a supporting role, says Brink, “know what you need to do fulfill that role as a value-added member and dont give anything away.”

Especially the financial direction one has in mind for the client. To that end, producers stress, plans should be sufficiently broad-based and flexible so as to accommodate disagreements over technical issues.

“If you stake everything on one technique, and somebody blows that technique out of the water, youre dead,” says Hartmann. “But if everyone buys into an end result, with several ways to get there, then you can have a productive discussion on approaches and methods.”

Planners who join multi-advisor discussions believing their approach is the only correct one, she adds, set themselves up to be knocked down. So, a bit of humility can be a great asset.

Attorneys and accounts, of course, may have their own preconceived notions. Brink cites the example of an attorney who viewed life insurance as necessary for paying taxes on illiquid estates but not liquid ones. Brink skillfully overcame the objection by pointing out that while insurance wasnt needed, it offered the most advantageous method of funding the estate tax liability.

Hence, the value of managing disagreements with diplomacy and professionalism. These and other qualities that foster effective teamwork will aid the financial advisor not only realizing a plan for the deal at hand, but also keep them in the good graces of partnering attorneys and CPAs, observers say.

Translation: More referrals from these other professionals and more business for the advisor.

Reproduced from National Underwriter Edition, September 9, 2004. Copyright 2004 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.


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