Daniel Brockley

Jan 09, 2024

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Leveraging Centers of Influence: A Strategic Approach for Financial Advisors

Ask most financial advisors how they get their best clients, and nine times out of ten, they’ll answer: referrals. Referrals are the lifeblood of new business for financial advisors, because what an advisor does requires an immense amount of trust from clients. Referrals from a friend or colleague are a shortcut to that trust. But referrals don’t have to be from other clients. Referrals from industry professionals in complementary occupations – so called “centers of influence” – can not only yield new business, but a higher level of service for your clients by integrating complementary services for a more holistic approach.

What is a center of influence?

A professional is considered a center of influence (COI) when they have a significant level of trust (and influence!) within a specific community or network, and are looked to for guidance. For Financial Advisors, the two most prominent COIs to partner with are Certified Public Accountants (CPAs) and attorneys. This is because any client with substantial assets or complex finances will require the help of all three of these pros: a financial advisor, attorney and CPA. So, it’s natural that these professionals might refer business to each other, and even work together closely to provide the best service for their clients.

Laura Jogani, a former financial advisor and current sales executive at Vanilla says, “The relationship between advisor, attorney and CPA is crucial with every client, but especially those that are high or ultra-high net worth. In family offices, you’ll often have these three professionals working in the same room with the client, strategizing together.”

It can become a mutually beneficial, symbiotic relationship. And when any of these professionals refers a client to the other, it’s more than a simple referral – it’s a professional endorsement. 

Building Center of Influence relationships: Key strategies for financial advisors

1. Mutual understanding and value

To develop fruitful COI relationships, financial advisors need to understand the unique needs and challenges faced by CPAs and attorneys. Offering them resources, tools, or insights that can benefit their clients can create a mutually beneficial relationship. It’s about adding value to their practice, which in turn, makes referring clients to you a natural next step. For example, advisors can provide valuable insights to attorneys when crafting estate planning strategies, since they tend to speak with clients more regularly than the attorneys. With the advisor’s help, the attorney can ensure the documents they draft align with the client’s larger financial goals. Financial advisors with the right estate planning software, such as the Vanilla Estate Advisory Platform, can be particularly helpful to estate attorneys.

2. Educational initiatives

Financial advisors can establish themselves as knowledgeable leaders by conducting seminars, workshops, or writing articles on current financial topics. This not only showcases the advisor’s expertise but also provides CPAs and attorneys with valuable information, such as The Estate Planning Checklist, they can pass on to their clients, reinforcing the advisor’s credibility.

3. Networking and relationship building

No surprise – much like building new client relationships, effective networking is key in building new COI relationships. Attend industry events, join professional groups, and engage in forums where CPAs and attorneys are present. Building relationships doesn’t happen overnight. It requires consistent effort, presence, and genuine interest in forming professional partnerships.

4. Consistent and valuable communication

Regular communication is vital. Newsletters, market updates, or personal notes can keep financial advisors at the forefront of a COI’s mind. This communication should be insightful, providing information that is relevant and useful to the COI’s practice and their clients.

5. Referral protocols

Develop a clear, ethical, and mutually beneficial referral protocol. It’s important that both parties understand how referrals will be handled, the type of clients you are looking for, and how you plan to manage the referred clients’ financial needs. That ends up providing proper expectations for all parties, a smooth working relationship between the COIs and a strong client experience. 

Overcoming challenges in COI relationships

Not every COI relationship will be straightforward. Financial advisors might face communication gaps, differing client management styles, or conflicting advice. You may also need to more clearly define who the lead for the client collaboration is, so that the experience is smooth for them, and they aren’t being asked the same questions by multiple parties. The only way the COI collaboration works to its potential is with clear, consistent communication between all parties. Address any challenges that come up with transparency, professionalism, and a focus on the client’s best interest. And it always help to assume positive intent by the professionals you’re working with.

A collaborative pathway to growth

Centers of influence for financial advisors are not just sources of referrals; they are pillars of growth and professional excellence. By fostering strong, reciprocal relationships with CPAs and attorneys, financial advisors can significantly expand their client base and enhance their influence in wealth management. It’s a pathway that demands dedication, strategic thinking, and a deep commitment to professional collaboration, but the rewards – both for advisors and their clients – are substantial and enduring.

The information provided here does not, and is not intended to, constitute legal advice or tax advice; it is provided for general informational purposes only. This information may not be updated or reflect changes in law. Please consult with your financial advisor or estate attorney who can advise as to whether the information contained herein is applicable or appropriate to your particular situation.