Developing strong referral relationships with accountants is an important part of building a successful advice business.
This article draws on the real-life experience of financial planners, Alan and Paul, to illustrate what can go wrong.
Buoyed by earlier successes with accountants and in an expansionary phase, Alan and Paul approached a regional three-partner accounting firm about a joint-venture referral relationship. Their timing was perfect. The accountants were looking for such a relationship and talks quickly progressed to a heads of agreement.
The process was assisted by the technical expertise Paul had acquired in working with complex clients that other accountants had referred to him and Alan’s growing capability in putting business deals together. To cement the arrangement, Alan and Paul took the accountants to Sydney for a series of briefings at their licensee’s head office. All went well there and so the scheduled dinner afterwards turned into a raucous tour of Sydney night clubs before the accountants staggered onto a plane home the next morning. Unfortunately, the deal never went ahead, with the accountants deciding to seek alternative arrangements.
I was present at the debrief session at which the accountants delivered the bad news. As it turned out, Alan and Paul placed too much importance on “let’s get them to Sydney; that’s the answer” and overlooked some of the basics of their earlier successes. In summary, they were over-confident.
They knew that they were very good at running referral relationships, which led them to accelerate too quickly through the confidence-building process that accountants need.
Instead of the Sydney trip, they should’ve undertaken some prototype cases, including a thorough debrief process, which would have laid a firmer foundation for the proposed arrangement and generated a deeper level of engagement.
Additionally, a few items that the accountants had thrown out to test Alan and Peter’s knowledge had been overlooked and no matter how much accountants may like you, this is terminal in terms of getting them to refer clients.
The accountants also indicated that Paul, in his eagerness to demonstrate his expertise, failed to pick up on some signals. As one of the partners later shared with me, “I felt like taking a baseball bat to him”. Alan and Paul were also too revealing. At some point during the early hours of the tour of Sydney’s night life, the accountants became distinctly uneasy about referring their precious clients to advisers with a penchant for splashing money around and partying hard.
Scott Charlton is a business coach and author.
