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other. " We're learning about their firm and how
we might be able to reciprocate with opportunities, "
Wilt explains. " Who's their ideal client? What
should we be asking in the marketplace to identify
someone that would be a good client for them? "
At the same time, Wilt educates the potential
centers of influence about CAPTRUST's model
client. His team's practice focuses on northeast
Ohio, Wilt says, and his goal is to work with companies
that are within a one-hour drive of Akron. A
professional firm servicing the same locale is a
good candidate for a strategic relationship, he says.
Wilt cites the example of working with retire " Most
of our peers don't have a
consulting actuary on their team.
They can't talk strategically about
a defined benefit plan and how
to get from where they are to
what the desired end state is. "
ment plan auditors. He looks for firms with extensive audit
experience versus CPA firms that provide audits just occasionally.
That criterion, combined with the geographic
requirement of staying in northeast Ohio, results in a short
list of candidates. Even if Wilt's team has not worked with a
particular audit firm, he says, it is a " small market, " and the
organizations are apt to be familiar with each other.
Seek Complementary Expertise
Plan advisers working in market niches can benefit from
matching their expertise with strategic partners'. Sean
Patton, a partner and senior consultant at Westminster
Consulting in Rochester, New York, says his firm has foreign
companies, not-for-profit hospitals and retailers among its
clients. Thus, he seeks to work with benefits attorneys, for
example, who have experience in those business lines.
The recognition of expertise is mutual, he adds. " It's
good to work with those who understand the unique challenges
and who recognize that you may have an expertise in
those lines that may be different from another person they
may refer business to. "
Avoid Bad Fits
It might be tempting to accept any referral you can get, but
Sampson discourages that response. " If you say you'll take
anything, you're going to get anything, " he cautions. " And
you're probably going to get referrals to clients that aren't
in your sweet spot or aren't your target market. Your target
markets really need to be aligned because if they're not,
somebody will be on the short end of the deal, and that's
when it ends up blowing up. "
Sampson also stresses the need to establish guidelines
for a strategic partnership upfront. For example, in his
experience, advisers typically receive many more referrals
than they can make to other firms. If a prospective partner
wants a quid pro quo arrangement, that should be discussed
in advance. " If you can deliver on that, then that works for
everybody, but it's not always the case, " Sampson warns.
Wilt cites an instance in which an ERISA attorney
approached him about partnering, but Wilt ultimately
decided to decline the opportunity.
" The attorney was much more about building his business
and not as much about helping the clients, " says Wilt.
" And I got a sense that if I were to send one of my clients to
them ..., I just wasn't comfortable with it. So, when it doesn't
fit, you just gotta walk away. "
Understand Expectations
Strategic partners also bring expectations to the relationship.
Patton believes that plan advisers " must bring something to
the table " says he thinks being in the business. That could
be delivering outstanding client service-making professional
partners confident their clients will have a good experience,
he says he has found. Another option is to provide
unique expertise. Patton says his firm has extensive experience
with defined benefit (DB) plans and he believes that
is a competitive edge in developing relationships. " This DB
expertise we have is unique, " he says. " Most of our peers
don't have a consulting actuary on their team. They can't
talk strategically about a defined benefit plan and how to get
from where they are to what the desired end state is. "
In Wilt's experience, very few partners " keep score " and
expect an equal number of returned referrals, but he agrees
that delivering reliable service is essential for developing
and maintaining these relationships. " Most of the folks we
find that are good, long-term partners, they're looking for
someone who's going to benefit their client first, " says Wilt.
Be Realistic
Referrals from strategic partners are a great way to grow
your practice, but for most firms those are just one part of
a business development plan. This is for several reasons.
First, even if a partner wants to refer a client to you, it might
be constrained from doing so. Sampson cites the small
likelihood of getting a referral from a recordkeeper. " Most
recordkeepers get their referrals from advisers, " he says. " So
it becomes difficult for the recordkeeper to make a referral
to me, because if it's referring a client to me, that means it's
taking it away from an adviser who probably brought in the
business. And that's not good business practice. "
A second reason is the difficulty of managing numerous
referral partners when you have a finite number of clients.
Patton has found it " gets uncomfortable and awkward " to
have a " huge array " of referring sources and partners,
because of the risk of conflicts in the relationships. He
says a better approach is to work with a smaller number of
relationships that align from a business perspective, and a
personality perspective. -Ed McCarthy
planadviser.com September-October 2021 | 35
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