Industry advice consulting firm Business Health has released a list of what it considers to be the top six mistakes made by advisers when conducting referral relationships with other professional service providers.
Published in the July 2012 edition of its Business Matters monthly bulletin, this breakdown of common mistakes follows a similar analysis by Business Health of the dos and don’ts associated with client referrals.
According to Business Health, the six top mistakes made by financial advisers when developing and maintaining client referral networks with other professional services firms such as accountants, lawyers and general insurance brokers, are:
Mistake 1
Assuming the referring professional is already aware of exactly what type of services the adviser offers, how the adviser is remunerated, how the service is actually delivered and how it can help the client.
The Client Value Proposition, underlying service offer and fee structure are rarely understood and remembered by clients, let alone the referring professional.
Mistake 2
Failing to articulate and document the terms of the referral agreement.
Clarify (document) the terms of the referral arrangement well in advance of any possible subsequent termination.
Mistake 3
Assuming there’s no need to communicate the progress of the referral or the final outcome.
With a referral being made, the adviser must assume the primary responsibility to handle the referral’s situation. But this certainly doesn’t remove the need for the referrer to be kept informed.
Regular scheduled catch ups with an agenda and actions coming from the meeting really work.
Mistake 4
Overlooking the need to position with advice practice staff the rationale and other details associated with the referral arrangement.
Take the time to explain to staff the background and current status of your active referral arrangements.
Mistake 5
Treating the arrangement as ‘set and forget’.
For any business to succeed it must regularly review its progress against its business and strategic plans, and not be afraid to adjust them if the circumstances warrant.
Mistake 6
Over promising, under delivering.
Business Health says this last common mistake needs no further explanation!
