The Secret to Productive, Reciprocal COI Relationships
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In my 18 years as a referral coach for financial advisors, I’ve heard every complaint about center-of-influence (COI) relationships. The number one complaint centers on reciprocity. My clients want the secret to productive, reciprocal COI relationships.
Some advisors think that if they can just give more to the COI, somehow that person will automatically respond and return the favor in a kind act of another referral. In some cases, that might work just fine. But in other cases, lack of reciprocity is a result of multiple symptoms in the relationship. Any time there are two people involved in a relationship there are opportunities for miscommunication, misunderstanding, and simple differences that cause frustration and sometimes friction.
I remember one client, we’ll call her Mary, who was complaining about a banker. Mary really liked this banker and thought he treated her clients extremely well. The problem was that he never referred any of his clients back to her over numerous years. Mary was getting more and more frustrated and didn’t know what to do about the situation. I asked her, “What did he say when you spoke to him about it?” You might suspect that her answer was, “I’ve never brought it up. I don’t know how to have this conversation.”
After we did some coaching, Mary finally had the conversation with the banker. The banker told her that unfortunately he would never be able to refer her because of his bank policies. The bank preferred that he refer their clients to financial advisors who were associated with big-name companies rather than a local RIA. The bank felt that they needed more security for their clients not knowing what would happen if Mary’s services were no longer available. His hands were tied. Mary was shocked at this response but now had a much clearer understanding of what she could expect from the relationship.
She had a choice.
Should she continue to refer to this banker, knowing her clients will be served well, but also knowing she will never be referred in return? Or does she find a new banker relationship that gives her the opportunity to receive referrals as well? Mary decided to maintain this relationship while beginning the search for an additional banker.
I’ve found that good, proactive, ongoing communication is often the missing link with COI relationships. However, the problem starts at the very beginning. Many advisors find their COIs simply by title. They search looking for a CPA, estate attorney, banker or commercial real estate agent. Once they find the title they’re looking for, most of the communication is superficial. Rarely do I find a financial advisor who has given enough thought to the characteristics they really want in their COIs beyond a title. It’s important for a financial advisor to be clear on what she/he needs in a COI relationship in order to find a perfect match from the start. Being clear on what you need and on what you expect from the relationship will avoid frustration.
That said, knowing this information is only the first part of the equation. The second part is communicating your needs and expectations with a COI at the start of a relationship so that you can begin working together with deeper understanding and appreciation. Sharing your expectations up front provides you with the opportunity to say, “I take my referral process and my COI relationships seriously. This is what I’m looking for from my COIs and what I’m also willing to do for them in return. Does this sound like something that would work for you?”
You also can extend the conversation to encourage your COI to add anything additional that she/he feels important as well. Before you know it, you’ve had a much deeper conversation about what this relationship is going to be like than you ever had before. This conversation becomes the foundation upon which you build the relationship and also gives you a focal point to use in the future as you evaluate your relationship throughout the year.
Communication is the missing link with COIs. Be clear with what you need and expect from the relationship. Encourage a dialog on this topic so both parties are happier knowing how the relationship will take shape. Maintain your communication throughout the year by scheduling time to check in with how the relationship is working. Like Mary, many of my clients have found that better communication with COIs reduces their frustration and creates a more productive relationship.
Michelle R. Donovan is a speaker and co-owner of Productivity Uncorked LLC, a coaching firm that helps financial advisors enhance their productivity and create organic referral processes. She has written a Wall Street Journal best-selling book, The 29% Solution (published in seven languages) and an Amazon best-selling book, A Woman’s Way: Empowering Female Financial Advisors to Authentically Lead and Flourish in a Man’s World. She can be reached here.