Don’t tell Kristi Sullivan, CFP, that trade shows are a frivolous expense. During a financial planning trade group’s recent conference, Sullivan struck up a conversation with an investment advisor at a neighboring booth.
The small talk turned to a deeper discussion in which Sullivan learned the money manager was seeking a skilled planner to provide formal financial plans to his clients, while also disclosing her own search for a savvy asset manager to handle investments for her clients.
And thus a strategic alliance — and a steady source of new business for both advisors — was born.
Sullivan is a fee-only advisor who, through Denver-based, Sullivan Financial Planning, LLC, offers financial planning services to clients and financial wellness workshops to groups. She’s a big believer in strategic alliances as a practice-building tool as well as a means to better serve her existing clients by affording them access to skilled professionals whose expertise and services complement her own.
“Instead of telling someone, ‘No, I don’t do asset management,’ I can say, ‘I have someone I trust who can do that for you,’” she explains. “And I get a nice referral stream when those money managers send clients to me for financial plans. It’s a really good backstop to my business to have steady work.”
Successful strategic alliances are built on an altruistic desire to better serve clients, not just a desire to generate new business, asserts Tamara Indianer, regional vice president, New England, for the broker-dealer Lincoln Investment. She has been instrumental in developing alliances between her team of 30 advisors and various K-12 educators and school organizations in the region.
It’s no coincidence that Indianer and other advisors on her team have close ties to the educational community via family members and friends. “We’re passionate about helping these kinds of people because we have personal affiliations to education and teaching,” she explains.
“The bottom line is, you have to be doing it for the right reasons and not strictly to get business,” Indianer continues. “If you’re involved with an organization (via a strategic alliance) and you understand the mentality and needs of the people who are part of that organization, you are going to be able to help them. And the more people you can help, the better off your business is going to be.”
Relationships worth pursuing
Strategic alliances have proven so successful for Sullivan that she has made pursuing them a priority. Prominent on the home page of her firm’s website is an invitation that reads, “I’ll partner with money managers to create financial plans that will strengthen your client relationships.”
That’s accompanied by an assurance to prospective strategic partners: “I am NOT your competition because I do not focus on gathering AUM.”
Strategic alliances come in all shapes and sizes. Some, like Sullivan’s, involve formal business relationships. She has individual contracts with the five wealth managers to whose clients she provides financial plans. She bills those advisors an hourly subcontractor rate for the services she provides. Regulatory compliance is a nonissue, she says, as both she and her wealth manager allies disclose details on the nature of their relationships in materials they provide clients and in their Form ADV filings with the SEC.
Other advisors, such as Ashley Parks, CFP, with Martin Financial Group in Dallas opt to pursue alliances that are less formal but no less fruitful. “There’s nothing really formalized about the strategic alliances I have with estate planning attorneys, CPAs and other specialists. We’re comfortable bringing one another in to work on a case together, or we can just call one another to discuss an issue or ask a question.”
For Parks, strategic alliances are about expanding the depth and range of advisory services she can offer clients, which is why she targets advisors who specialize in areas outside her own financial planning expertise — areas that fit the needs of her clients. “You have to really figure out who the best types of people are to help your clients” and pursue alliances accordingly.
As crucial as selectivity is in choosing the advisors with whom you align, it’s also important to give clients choices in terms of the specialists to whom you provide them access, she notes. “It’s not about having as many [professional alliances] as possible, because it’s important that you really know the people you’re sending your clients to. But you want to have a few options in each category.”
While Parks has chosen to focus on building alliances with professional advisors in areas of specialization outside her own, other advisors see strong alliance opportunities beyond the advisory community. Besides cultivating ties to asset managers, Sullivan works with the Denver-area nonprofit Evelyn Brust Financial Research & Education Foundation, providing educational seminars on financial security at public libraries on a pro bono basis.
Their work with groups representing school business officials and other educational organizations positions Indianer and her team to serve a largely underpenetrated market. “Everyone’s going after high-net-worth individuals, but what really gets me charged is working with Middle America and the people I feel are underserved” by the advisory community as a whole.
Formal or informal, inside or outside the advisory community, strategic alliances require patience, tact and due diligence to cultivate. “It has taken a long time to build the relationships we now have,” Indianer says. “And it has happened organically. I never, ever have asked for business. I have worked to cultivate relationships with these people, to the point where they come to me and say, ‘I know you’re a financial planner. I need help with my retirement plan.’”
Choose your strategic partners wisely, particularly among other advisors, says Sullivan, because ultimately the quality of their work with your clients will reflect back on you either positively or negatively. “You want to be sure their ethics and way of doing business align with yours.”
“It’s important to have conversations [with potential strategic partners],” adds Parks, “to understand who they prefer to work with, the approach they use with clients, and whether they’re open to me being part of the meetings they have with my clients, because many times, I want to be in those meetings to be sure all the pieces of the plan fit together.”
Relationships with depth
Most strategic alliances don’t run on auto-pilot. Keeping them mutually productive requires time, effort and creativity.
Indianer says she and her team at Lincoln make a point of regularly attending conferences, meetings and other events involving school business officials and educational groups. To get a foot in the door, Lincoln has earned “vendor provider” status with some school districts, meaning its advisors can attend targeted business events alongside other vendors like food providers, architects and paper suppliers.
To further deepen and leverage the strategic relationships they have established in the education community, Lincoln advisors also provide free seminars and workshops for school employees on subjects like pensions, Social Security and comprehensive financial planning. “Hopefully they like us, come to trust us and want to work with us because they believe we can help them,” says Indianer.
But there’s more to strategic alliances than business relationships, she adds. Lincoln advisors also volunteer their time at schools, providing students with financial literacy education and guidance to programs such as Junior Achievement.
Like any business relationship, strategic alliances with other professional advisors require frequent touches and open communications to remain fruitful. “I keep in regular contact with the money managers I work with,” Sullivan explains. “I make a point to have lunch with them and to go to the client events they hold. I want to be sure to remind them of what I do and how I can help their clients.”
Besides meeting informally with her strategic allies over lunch to catch up and talk business, Parks says it’s important to periodically evaluate whether those partners are providing good value to her clients. “You need to make sure they’re continuing to give good service to your clients. So it’s important to get feedback on them from clients. Ask them to be honest about how they like working with that person.”
Gathering that kind of intel is vital, she says, because ultimately a strategic alliance “always has to be in the best interests of the client.” Use strategic alliances to do right by your clients and good things are likely to happen for you and your practice, according to Indianer, who says the alliances she’s built provide not just a steady stream of business but a renewable sense of personal and professional fulfillment. “It gives us the ability to work with the clientele with whom we want to work and to do something we’re passionate about — help people.”
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