Zurich has published a very good summary for advisers who want to make the most of their referral relationships.
Written by Marc Fabris, Zurich’s Strategic Marketing Manager - Risk, and entitled ‘Creating Winning Referral Relationships’, the article is published in Zurich’s Z2A Spring edition (see also previous story: Death Cover Selling Secrets).
…successful advisers leave nothing to chance in their businesses
In his capacity as a member of the selection panel for the AFA Adviser of the Year, Mr Fabris has conducted on-site interviews with many of the country’s top financial advisers and has shared a number of observations on how the successful advisers leave nothing to chance in their businesses, including how they develop and manage their alliances and referral relationships.
Mr Fabris says that writing more business through referrals doesn’t just ‘happen’. Rather, it requires:
- A methodical approach
- Good planning
- An investment of the adviser’s time and energy
According to the article, key elements that contribute to creating winning referral relationships include:
Using existing client relationships
One of the benefits in sourcing referral relationships through existing clients (eg their solicitors or accountants) is that the adviser and referral source already have common ground in that they share a mutual client.
Shared values and personal chemistry are also highlighted as important ingredients when deciding whether to proceed.
Gaining the trust of the referral partner
Sharing testimonials from exiting clients can be a valuable tool in helping to gain the confidence and trust of the referral partner, who is often a professional who may need to be convinced about the bona fides of the adviser before entering into a referral relationship.
Implementing the most appropriate type of agreement
The article points out that not all referral relationships are based on fees being shared. According to Mr Fabris, there are three types of financial arrangements, and advisers should adopt whichever arrangement best suits :
- Those where no money changes hands
- Those where upfront fees and commissions are shared
- Joint ventures (where trail commissions and profits are shared)
Setting goals
The article says that goal setting is ‘…an important prerequisite for creating winning referral relationships.’
Some tips include:
- Set an ideal minimum goal for each alliance (eg by revenue or number of referrals etc…)
- Determine concrete tactics for developing the relationship on an ongoing basis
- Diarise regular meetings, both formal as well as more informal ‘catch-ups’
Mr Fabris contends that only a small proportion of advisers maximise the value of their referral relationships, which is surprising, given the financial and other benefits that can be derived.
Click here to read the full article.
