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Beyond referrals

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Referrals. They’re the lifeblood of many a financial services practice. Without them, books of business fail to grow, practices stagnate, incomes fall and careers fade. But even with referrals advisors can find themselves working too hard, chasing a numbers game that rewards too few and punishes too many.

“We used to do the numbers game, and we got business,” says Todd Wooten, president of Wooten Financial Services in Valparaiso, Ind. ( “But we didn’t get long-term business. There was no loyalty factor.”

The difference between cold leads and warm leads is obvious to any advisor, but what about the difference between a referral and a personal introduction?

Referrals come in a couple of different manifestations. One type is where the advisor never even knows it was made: “Hey, this guy took care of my financial plan. You should call him; here’s his card.” The other leaves the advisor stuck making calls and name-dropping — “Hey, Mr. Advisor, here is a list of names and numbers of friends of mine you might be able to help” — which can work to a satisfying degree in many cases but leaves something to be desired.
Personal introductions from other professionals — whether in the financial services arena or peripheral to it — trump either form of referral. They carry an implicit endorsement of the advisor and, by taking place in the other professional’s office, can put all parties at ease.

Many advisors already have these kinds of relationships in place, having cultivated them for years. While the list of potential allies can be long, there are a few professionals that come up repeatedly. The big five are detailed below. These are folks whose help can take an advisor’s practice to the next level, provided the advisor is willing to do the same in return — actually, provided the advisor is willing to give something first. When seeking out these all-important alliances, remember one thing — maybe the one thing that costs some advisors the relationships they seek: “Give value before asking for it,” says Jack Keeter, president of Jack Keeter and Associates ( in Anaheim, Calif. “They’re going to want to know, ‘What’s in it for me?’ Convince them of the value you bring.”

If this list were to be broken out by more specific individual titles, attorneys might occupy half of the top 10, that’s how often they are mentioned by advisors. Senior advisors likely are most interested in lawyers who specialize in elder law and estate planning — they have clients in the right age group and with the right needs. Keeter says estate planning attorneys are nice to form alliances with because they “deal with people at transitional times in their lives.” Estate planning attorneys are there when there is a death in the family; when someone is readying for retirement; or when someone receives an inheritance — all situations that make people take a second look at their entire financial picture.

Wooten says attorneys are a solid addition to any advisor’s team because — like it or not — they are higher up the admiration-ladder than advisors.

“People respect attorneys before planners,” Wooten says, especially in light of all the recent negative coverage of the financial services industry generally and annuities specifically.

Advisors love getting introductions from accountants. CPAs have access to all of the information an advisor needs to help clients and they have their clients’ trust, especially if they are as adamant about doing what’s right for the client as good advisors are. Nathan O’Bryant, president of O’Bryant and Associates ( in Huntingdon, Tenn., works with a CPA, and he wishes he could work with many more. It’s not for lack of trying.

“In such a rural area, there’s only one CPA in town,” O’Bryant says.
Why does he like CPAs so much?

“They’re looking at everyone’s tax return,” O’Bryant says. “They can see people’s tax burden and introduce them to professionals who can reduce it.”

LTCI specialist
Long term care insurance takes too much time and effort. So goes the thinking for many financial advisors, but the product is important to most plans, so it cannot be pushed aside. Planners who don’t want to deal with the LTCI side of things would be wise to forge an alliance with an LTCI specialist — and there are plenty out there. Entire networks of LTCI-only advisors have sprung up in the last decade or so. Some are sponsored by marketing organizations and some have grown organically, but the common thread is that these are people who don’t want to steal an advisor’s planning opportunities or annuity business. They specialize in LTCI.

“There are a lot of reasons to discuss LTCI with clients, even if you don’t want to deal with it,” says Stephen Drain, senior vice president, marketing for Personalized Brokerage Services in Topeka, Kansas. “For a lot of advisors, LTCI is a messy thing. It’s a dramatic conversation that requires a lot of
patience. Some people might not have that.”

Personal lines agent
Other insurance agents are good people for senior advisors to know, especially those who specialize in the personal lines of insurance like auto and homeowners’ insurance, Wooten says. They usually have huge books of business — hundreds of clients — but they don’t deal with finances much.

“Personal lines agents represent a tremendous opportunity for advisors,” Wooten says. “They’ll have anywhere from 500 to 3,000 customers, but they don’t want to talk about financial planning [with their clients]. It’s a huge opportunity.”

Advisors will have to spend some time with the agent, teaching him how to recognize the advisor’s ideal client profile. Random, widespread introductions have the potential to bog an advisor down if most of the potential clients are the wrong fit.

Securities-licensed broker
Advisors who choose to eschew securities licenses and stay with their life and health licenses only will need to become friends with a securities licensed financial professional, Drain says, especially from a suitability standpoint.

“It boils down to doing the right thing for the client,” Drain says. And having the capability to talk about securities and insurance products goes a long, long way to doing the right thing.

Drain says many senior advisors get their securities licenses and park them with a broker-dealer so they can talk about variable products and securities even if they never plan to sell them. That way, he says, “They can have a conversation about risk assessment legally, and talk about moving money from variable to fixed products.”
Advisors who want to concentrate on insurance and annuities need to find a friendly securities broker who understands the importance of fixed products in an overall financial plan but doesn’t necessarily want to sell them.

Financial professionals who are still playing the numbers game should stop, unless the prospect of hundreds upon hundreds of short-term relationships sounds appealing. Long-lasting, fruitful relationships come from developing trust and friendship, and receiving personal introductions from other trusted professionals goes a long way to establishing the advisor as the planner. Find experts in other fields who share the same values and service philosophies and help each other be the best.


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