This article is for attorneys and financial advisors alike. Referrals require a strategy. They sometimes happen in very large, mature law practices, but a process can make referrals flow with more frequency. Referral processes can be put in place and processes actually work well.
Would attorneys like to receive consistent referrals from 10 or 15 financial advisors each month? It can be done. Would financial advisors like to have a resource that would help them gain clients? You bettcha. Financial advisors come in all types. There are insurance agents, investment advisors, investment advisor representatives, registered representatives, and many others. They all have one thing in common. They try to get clients to invest money with them. Attorneys like referrals from them but there's a critical error that is not addressed. The financial advisor only refers clients. These clients are usually “tapped out” on their ability to bring new revenue to the advisor. So, there is our clue to referral success. We need to explore how you can generate revenue for the advisor.
The advisor is generally referring as a courtesy to the client. He can't make any more money, so it's not important to refer. One exception is if the client has estate tax or income tax issues that can be partially solved with legal documents or similar solutions that generate revenue. Advisors should bring prospects, not just clients, to attorneys. The advisor has huge potential and incentive to bring prospects because they have not "tapped out" as a revenue source. He has ample incentive to want to bring the attorney referrals.
Before I sold my financial practice, my relationship with an attorney brought in over $300,000 a year in revenue to my firm. His revenue increase was over $100,000 because of my referrals of prospective clients from my firm. It was a matter of convincing the prospect that a proper financial plan integrates investment options with legal options. I would bring the prospects to the attorney for a free consultation. The attorney would ask the necessary questions for his research. The same information is valuable to the advisor, so I would simply take notes in the meeting. Of course, I had permission in writing to be in the meeting with the attorney.
This became my discovery process. All of the prospect’s financial and legal weaknesses were exposed in one meeting. Revocable trusts were executed and I volunteered to handle the funding unless real estate was involved. The attorney handled real estate titling. Since I handled the funding at no charge, I also had plenty of ideas for the destination of the assets that were superior to where they were. All parties were winning. The new client received a solid financial plan with supporting legal documents. The attorney created the documents. I, the advisor, had the opportunity to handle the investments.
My attorney (Tom) did an excellent job of assuring the client that I was a competent advisor and a good choice. I had demonstrated my sincere resolve to create a solid financial plan by offering a service for which I was not paid. The one thing Tom could have done to further enhance his practice was to expand his referral sources to additional advisors. He didn’t create a mechanism for recruiting them. He should have created a program to offer other advisors his expertise and knowledge about a process that would work for both the attorney and advisor.
Imagine ten advisors like me. The advisors will bring quality prospects because they will be assured that the attorney will do his best to help convert them to clients. Since the advisor will vet them for quality, the attorney will get quality referrals. I presented seminars and integrated legal documents in my presentation. Presenting how legal documents were important to a good financial plan, I had plenty of prospects to bring the attorney. I presented these seminars with a legal document component. Since I can’t give legal advice, I simply told three brief stories about clients who suffered serious financial loss due to a lack of legal documents. Stories about what happened as a result of not having a healthcare power, durable power and living trust. I would have a significant number of attendees who wanted to be referred to an attorney. I went further than that. I introduced them personally. Tom also loved the idea that I was spending my money on marketing.
The advisor and attorney must be trained on their roles. Also, in order to give the advisor the attorney’s blessing, the attorney must know what the advisor does and due diligence on background would be appropriate. There are advisors who the attorney does not need referrals from. They are incompetent or too restricted in their practice options. I can help with the training and selection.
The seminar I presented was called 7 Ways Retirees Crack Their Nest Eggs. One of the 7 ways was a lack of proper legal documents. Around 30% of my seminar attendees wanted to meet with an attorney. The attorney will need advisors who are actively marketing. Of course, I can help them with the marketing.
Clearly, this will take time to develop, but will be well worth the effort.
Kim has personally presented over 800 seminars and produced over 8,000 for other producers.