The Right Allies – Find Them and Keep Them

To grow their firms significantly, most advisers need to learn to move beyond their own existing quality clients and acquire additional ideal clients. Forming strategic alliances with the right professional advisers—such as accountants and lawyers—is one of the best avenues for accomplishing that goal. Unfortunately, these strategic alliances are an area where many advisers often get tripped up and frustrated. They think that it isn’t worth their time and effort.

So, here is some advice on how to handle strategic alliances, and have the right allies on your side.

The Key to Success

Unlike a casual or informal referral arrangement, a strategic alliance is a business development agreement designed to motivate each partner to help the other one grow. This agreement creates economic glue that holds together a mutually beneficial partnership and sets the stage for a long-term and profitable relationship for both parties.

The heart of the agreement is providing a set of benefits to the other professional—most often in the form of additional services or more specialised expertise—that result in additional revenue. While you can develop strategic alliances with any professional who shares your target market, alliances with accountants and lawyers tend to be the most powerful.

We know for a fact that strategic alliances are an important resource for the top financial advisers in the industry today. When our international partners CEG Worldwide ( surveyed nearly 2,100 advisers, they discovered that more than 80% of wealth managers see referrals from other professionals as a very important source of new clients. In sharp contrast, just over a quarter of investment generalists regard such referrals as a very important source of new business.

Furthermore, referrals from other professionals are also extremely important to the success of wealth managers. Again, more than 80% of wealth managers told CEG that their five best new clients were referrals from other professionals—almost five times the number whose top five new clients came through client referrals.

Meeting the Challenge

Many financial advisers find it difficult to form effective strategic alliances with other professionals. Frustrated advisers often tell me they’ve invested significant time and effort in this area, with limited results. The problem typically is that the strategic alliance partner does not feel highly motivated to work with the financial adviser, and therefore he or she doesn’t refer many (or in some cases, any) of his or her clients.

The solution to this problem is to clearly and compellingly communicate the benefits to a potential strategic alliance partner. You’ve got to spell out what’s in it for them when they send their clients your way.

This can be done by focusing on three benefits:

Money.  It’s common in revenue-sharing agreements between advisers and accountants for the accountant to get a share of the gross revenues generated through the agreement. (We strongly believe that the revenue-sharing agreement should apply only to the first year fees, and recommend that a suitable share is 15% of the gross revenue.) Sit down with the accountant, and using a whiteboard or spreadsheet, carefully go over the financial potential that he or she could realise by referring clients to you regularly. Together, brief a strategic action plan estimating first-year revenues and (reasonable) revenue growth projections over the next two to three years.

Indirect Incentives. Lawyers rarely enter revenue-sharing agreements; however you can still show the potential partner that there are tangible benefits to working with you. You can highlight the desirable aspects of working with someone who shares the same level of integrity and devotion to client service that they possess, and show how the two of you can collaborate to solve the clients’ broad range of challenges. You can offer to help the lawyer build his or her business by providing reciprocal referrals as a member of your network of experts. Another form of economic glue may be found in your ability to offer practice management support. Many lawyers know that there are untapped opportunities for marketing, but simply don’t know how to develop a marketing plan. They may well be interested in leveraging your skills to target the right clients and charge the right fees.

Your Consultative Process. Show your potential strategic alliance partners how well you will take care of their clients if they send them your way. Demonstrate the value you offer to your existing clients via the wealth management consulting process. Explain in detail how you work with clients to develop a long-term relationship addressing the full spectrum of their wealth management needs, and how you consistently deliver superior service. Better yet, encourage the accountant or lawyer to experience your discovery process personally and appreciate its value first hand.  Demonstrate how you uncover your clients’ deepest values and goals – what is truly important in their lives. Any professional may be wary of sending their clients to an adviser who may be a hard-core salesperson. By showing that your initial experience with a prospective client is all about having a conversation, not selling something, the alliance partner will feel much more comfortable making referrals. In fact, make it clear that all you are looking for when the alliance partner sends you a client is to engage that client in a discovery process—nothing more.

You can also make a great deal of headway with a potential partner by suggesting a pilot program in which you work together with a specific number of select clients. Ask the professional to send you a few clients, and then decide together whether to move forward, based on how that experience goes. This pilot program becomes a relatively low-risk venture for both of you.

Additional Alliance Tips

As you explore alliances, keep in mind that you need to choose your potential partners carefully.  Only work with professionals who are entrepreneurial about their businesses and are looking to develop their firms in meaningful ways. Too often, accountants and lawyers are content to let clients come to them and are happy to perform compliance or transaction assignments (such as tax returns). That approach works for many business owners, of course, but professionals who aren’t interested in actively pursuing strong business growth do not make good alliance partners for advisers who are.

If you can see that a potential partner does not share your entrepreneurial spirit—which should be obvious after only a meeting or two—simply move on to the next opportunity. A partnership that does not work in the beginning will not be any better a year from now. As with your client base, you don’t need 10 average strategic alliances – you need one or two ideal ones. Don’t be afraid to say no when the partnership is not in your best interest.

In the end, there is no question that strategic alliances can have a tremendous impact on your business. Indeed, the best advisers in the industry rely on them to succeed. By overcoming some of the challenges and presenting a clear, compelling value proposition, you’ll maximise the likelihood of making alliances happen—and your efforts will pay off for years to come.

Image: Michelle Meiklejohn /

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