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Do you use referral arrangements with outside experts like lawyers or accountants?

Dave Lee

Dave Lee

senior wealth advisor, Scotia Wealth Management, White Rock, B.C.

 

Yes, I use referrals, but they aren’t formal arrangements, so no disclosure is required. The best referrals are freely given and arise from demonstrating above-and-beyond service. For example, at tax time I prepare tax packages for clients and their accountants, and make my team available for questions.

In fact, my main connection to accountants and lawyers is through my clients. To discover the best professionals, I ask clients for feedback on those they’ve worked with: Did they do timely, quality work? I’ve also established a network as a past president of the Fraser Valley Estate Planning Council and by offering educational seminars and working for charity.

Patti Shannon

Patti Shannon

VP, portfolio manager, Leith Wheeler Investment Counsel, Calgary

We give and receive referrals from lawyers and accountants, but there’s no compensation involved, which could lead to potential conflicts of interest.

When I give a referral, it’s based on the best professional for the client, not on someone who will give me a referral back. It’s my job to know who’s the best in my network for various client scenarios. For example, a cross-border client might require estate planning involving multiple homes.

Typically, when my firm receives a referral from our professional network, it’s along with referrals to our competitors as well. That’s ideal, because prospective clients can interview a variety of managers to find the best fit. As a result, if they choose us, our client turnover rate is reduced.

Tom Trainor

Tom Trainor

managing director, Hanover Private Client Corp., Toronto

Our new clients come from referrals made by existing clients or by lawyers or accountants. When new clients already have lawyers or accountants, these professionals are a key part of our
information-gathering process, because they’ve got a lot more experience dealing with the clients than we do.

For example, clients are often unaware of technical tax details, so I’ll learn about reassessment details or other outstanding tax issues from their accountants.

When we make a referral, it’s based on the best fit for clients. Wills, for example, can be complex if the client has multiple marriages and children. Knowing the best professional for the job is important because, typically, clients want their issues dealt with in a timely, competent manner. They’re not interested in a shopping list of names.

None of these referrals are paid arrangements. Over the years, as I’ve worked with other professionals on client issues, I’ve learned the roles they fill for clients and I’ve come to respect their abilities, as they have mine.

Agree? Disagree? Have your own question or answer? Write us at news.advisor@tc.tc

Originally published in Advisor's Edge

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