Many Financial Planners rely on referrals for new business and these can be a valuable and cost-effective way to find new clients but how to go about it? Developing long-term professional connections with local firms of solicitors, accountants and other professionals is one way.
Many planners find this very effective but building a relationship with other professional can be challenging and fraught with problems.
Lawrence Cook of Thesis has many years of experience in the area of helping planners develop their professional connections.
In this article he shares his experience, looks at a case where things had started to go wrong and offers some dos and don'ts for planners looking to develop their links with other local professionals.
Mr Cook says most planners would benefit from developing professional connections but it needs to be a meeting of minds and not a purely commercial process and he offers some advice to planners considering this area or looking to develop their connections generally.

What to remember when sourcing new connections
Generating business from professional connections such as solicitors and accountants has long been an objective for Financial Planners seeking new business. That enthusiasm from planners for people they see as potential business partners is often dampened by the practical realities of working in this market. Stories of frustration as a result of failed strategies and arrangements are not hard to find.
So why are so many well-intended plans not effective when it comes to working with professionals?
Well thankfully there are enough successful examples for us to draw upon to answer this point. In this article we will share some experiences and provide some guidance to help planners potentially become more effective in this market. We have a long tradition of working with lawyers in particular having been founded by a solicitor firm in the 1970s. This has helped our view that Financial Planners working well with other professional connections can have a very positive impact on business development.
For most planners they will already have some professional connections and rarely start from a blank piece of paper. Reviewing existing relationships and why they are not working are usually very revealing insights. A Financial Planner I recently met highlighted many of the common issues.
I met Paul at a coffee shop at a south coast town one morning. This was the first time we had met having been introduced by a mutual contact. Paul lost no time in enthusing about Financial Planning and his business. I felt that at a client meeting Paul would surely have been engaged very quickly. I found out that his business was doing well, his service proposition had evolved over several years and felt he was delivering excellent value to his clients.
{desktop}{/desktop}{mobile}{/mobile}
The mood darkened however when I asked Paul about how he was getting on with professional connections. So much so he had to refill his coffee cup before he was prepared to share his sorry tale.
There was the usual trail of reciprocal business which had petered out and apparently warm relationships with other professionals which appeared effective but one by one fell by the wayside. All this meant that he questioned whether this was worthwhile. After all, the amount of time spent networking and getting to know people was not insignificant.
I then asked Paul how he went about developing his professional connections and this seemed to reveal the root cause of his problems; Paul's approach firstly was practitioner-led not business led. In other words Paul talked to a solicitor about client matters and client issues which quickly moved to what professionals offer their clients as a solution. This type of conversation tends to focus on technical issues and detail, it does not deal with he business and commercial interests of either firm. This practitioner behaviour is the default setting and is rarely effective in the long term. It might generate the odd referral. I call this the hamster wheel of reciprocation – you had better be a fitter hamster than most because this is the same approach that the majority of other firms adopt too. Some larger Financial Planning firms will put together a small team to meet a similar-sized team of a professional connection. This tends to be an even worse example of practitioner-led behaviour – two teams politely telling each other how clever they are over some prawn sandwiches is not usually effective but very commonplace. It is also what your professional services firm is expecting from you, despite the usual mixed results that are likely. Let's get back to Paul and his story. We talked about some specific meetings he had endured. They appeared to go well according to Paul but did not generate the flow of referrals he wanted or had expected. After all Paul had painstakingly explained his fantastic service proposition, how clients would benefit and the general positive impact he could have on the solicitor's clients. Not only that, Paul told the solicitor how Financial Planning often identified further legal services required over time. What Paul had not done was spend much time finding out about the professional's firm and their interests. Too much telling and not enough
listening. He revealed he had targeted a number of firms,
in fact he had met 17 firms over the last year. Not surprisingly there was no real focus on any one firm. No doubt word got around fairly quickly that Paul had been doing the rounds. One wonders how 'special' the individual professionals felt knowing they were one of 17!
So after some considerable effort expended Paul was now not at all well disposed to developing professional connections. At a follow up meeting we managed to pick our way through some of the issues and look for ways to improve Paul's chances of success. In the table on the previous page are some of the key action points we discussed. With Paul now clearer about how to go about developing his professional connections he is pleased to be reporting an improving picture.
{desktop}{/desktop}{mobile}{/mobile}

Skills and behaviours that work
One of the key behaviours to adopt is a consultative one. Many planners are excellent at drawing out issues with clients and taking a strategic approach. Curiously this effective behaviour seems to go out of the window when developing professional connections.
A consultative approach means asking questions within an overall strategy and it is no good asking any open question, it needs to have purpose and the questioner needs to be confident that they have something to offer at some point.
Before meeting your professional connection make sure you have clearly signposted the type of meeting you want – if you ambush a managing partner with questions about his business when he is expecting to hear all you know about trusts, then you are likely to fail. So set out to talk about their business and explore areas where there may be common ground where you may be able to help. You can reinforce your professionalism and intent by sending an agenda in advance. This will prepare your professional connection and will have the added benefit of making you feel obliged to prepare thoroughly. Below are some key ways to build a consultative approach.

Consultative track and initial meeting
1. Knowledge. Know your target firm and their market. Know who you are meeting and what their own speciality is. Do some reading of related articles to ensure you are well informed.
2. Prepare what to say and how. Asking a good open question and staying silent to hear the answer sounds obvious but is critical to success. If you are keen to show your knowledge, ask a question about the topic which engages, don't tell or present.
3. At the meeting. Don't use PowerPoint and avoid handouts. The value is in the conversation about his business, not yours – after all you are after his clients. 4. Beginning the meeting. Restate the purpose of the meeting and have copies of the agenda. Get agreement to proceed. If there is a mismatch of expectation you are unlikely to succeed.
5. Questions, questions. These are your tools. Think about a range of open questions that will get the conversation going. 6. Topics to talk about. All businesses have essentially three key issues; Revenue, Costs and Risk. Everything else will fall ultimately under one of these. Ask questions about these key areas and use terminology appropriate to the audience, for example solicitors talk about client 'matters' not cases or sales.
7. Areas of stress for the business. If everything is rosy then changing behaviour to refer clients to you doesn't really help the professional connection. Find out what isn't going well for the professional and find ways you can help.
8. Summarise issues identified and agree what area should be taken forward for further discussion.
If you reach the end of your initial meeting and have not talked in any detail about your proposition that is probably good news – it means you have been talking about their needs, not yours. Once you have made some progress towards finding common ground you have a much better chance of becoming a valuable asset to your professional connection, after all you are helping to
deal with some of the major business issues.

Ongoing matters of importance
Conflicts of interest. Highlighting at the beginning of a relationship your approach to such matters will help. Being prepared to introduce a fellow planner to take on work is a good demonstration of your professionalism.
Client handling. Decide how clients will be referred and encourage joint meetings where possible. The professional will be able to see your work at first hand and gain confidence to use you more. Once trust in each other has developed you have a good foundation on which to build.
This is a good place to start talking about strategic alliances including Alternative Business Structures. There are a number of different ways to build an alliance and it's worth seeking expert advice and consultancy. If handled well, there are great opportunities for planners and professional connections alike.