Stakeholder management and good communication are critical to the ongoing success of referral relationships between financial planners and accountants.
The key to managing a referral relationship in the first instance is making sure you set, agree upon and then meet expectations. One of the key considerations in this process is in understanding what type of clients will be referred to ensure that there is a match between the clients and their relevant needs.
The planner and the accountant need to have a good discussion about the realities how many clients will be referred. For example, if an accountant has 1000 clients but only 30 meet the client service proposition of the planner, it’s unlikely that you will meet the expectations of the financial planner.
This is also important for managing the expectations of the accountant. If they refer clients onto the planner with the expectation that they will be looked after, but the planner isn’t interested in them because they’re not an ideal client, then this potentially reflects badly on the accountant. So expectations need to be managed on both sides.
In setting expectations, both the planner and accountant also need to agree on levels of service. For example, if an accountant refers a mid-size client who is after an insurance policy, but the planner wants clients who are seeking holistic advice, then it is unlikely the referral will be a successful one. Given an accountant will usually start out by referring smaller clients to gauge how well the relationship might work, this is another important reason to set expectations around service levels.
Both parties also need to agree on how regular referrals will be provided. If the accountant is thinking about providing just a couple of leads per month to start off with, but the planner is expecting five a week this could see a relationship off to a rocky start.
Communication is also an important part of the process. So through the client engagement process, establish how often both parties will communicate, what sort of things will be communicated about the client and what the outcomes of the client engagement process were. Post-referral, it is important that the accountant knows what the experience was like for a client so they can talk about any outcomes as well.
Depending on how serious the referral relationship is, both parties should establish how frequently they catch-up to discuss workflows and clients, whether it be monthly or fortnightly. More significant relationships may require a more formalised system to ensure that both parties to the relationship are kept up-to-date with any developments and outcomes as a result of a client referral.
In my next blog, I will discuss how financial planners and accountants can establish more formal referral relationships.
