You’ve decided to move to a partner-based model. What now? List the desired skills and areas of expertise you’re looking to bring into your practice. While this will ultimately serve as a checklist in your quest, it will also indicate if you should be seeking one partner or several.
Take a cue from your clients. What have they asked for? What service gaps have you identified when reviewing their financial health? Then, address your plans. What do you want to offer your clients?
Kevin L. Gebert, President at Green Rock Financial Group Inc./Partners In Planning Financial Service Ltd. in Surrey, B.C., has been using a partner-based model for the past three years.
“Each [of my clients’] goals usually needs another professional to help execute,” he says. Since his partners include an accountant, lawyer, mortgage broker, benefits specialist and debt counsellor, that’s not a problem. He also hopes to add a realtor, home inspector and funeral director.
His rationale for using this model is simple. “I focus on what I do best and find others who are experts,” he says. If clients already work with the professional needed, Gebert works with them or provides a name for a second opinion. “By adding value for my clients, I meet other professionals who may refer back to me.”
Scott Plaskett, CEO of IRONSHIELD Financial Planning Inc. in Toronto, has been using a partner-based model since 1993. In addition to financial services partners, Plaskett offers referrals to executive compensation specialists, auto mechanics, recruiting agencies, website developers, IT providers and reference-checking specialists.
“Clients come to me after life events have triggered needs—and they’re not necessarily financial,” he says. For example, a client who’s new to the area might need to get his car fixed. “I encourage my clients to see me as a resource. They can leverage off the networking that I do.”
Next, seek out prospective partners. Your efforts will be more fruitful if you’re active with your clients and in your community.
“If we see someone who is great at what they do, we refer someone to them and watch how the referral goes,” says Plaskett. “We’re interested in their level of communication with us and the overall client experience.”
Another tactic Plaskett uses is to ask existing clients to refer him to their best relationships. But “not all referral partners work out,” Plaskett cautions. “Some people are simply less motivated to make it work.”
Plaskett also has a formal system in place with his staff. “At our monthly staff meetings, I ask them if they’ve had any standout experiences with other service providers. While I don’t have success every month, every so often I get a name of someone worthwhile to contact.”
Common places to seek partners include chamber of commerce meetings, conferences and educational events. “Don’t overlook the valuable resource of mutual-fund wholesalers who get into big branches,” says Nancy Shewfelt, senior vice president and director at Wellington West Capital Inc. in Vancouver. “Word of mouth is the best way to find good people.”
Potential partners may also come to you. Shewfelt’s partner-based firm began in the early 1990s when she married her co-worker Clark Shewfelt and they combined books. In 2001, upon moving to Wellington West Capital Inc. from Scotia McLeod, the Shewfelts asked Paul McMillan, whom they had been mentoring, to join the partnership. In 2006, they added a fourth partner: Norm Rutherford, a 60-year-old ex-banker who had been in the investment business for seven years at BMO Nesbitt Burns.
You can look outside the box, too. When seeking a partner, Kathleen Peace, a CFA at Bennett March Inc. in Toronto, saw an article in the “Toolbox” section of Advisor’s Edge that caught her eye. Realizing the author, Jason Pereira, had valuable skills she could use in her practice, Peace decided to contact him—and the rest is history.
If you have difficulty finding quality partners nearby, get creative.
Gebert always envisioned a physical office of professional partners, but has settled on a virtual construction. He asked each of his clients for their professional advisors, but found most professionals were already in their own partner-based model. Undaunted, Gebert started his own chapter of Thinkreferrals Business Network to find new partners and bring existing partners together.
The network rewards both him and his clients. “Each professional partner will give my clients a complimentary 10-to-15 minute phone call to make sure there is a good fit,” he says.
Next, get to know potential partners on a professional and personal level. And take your time.
Wellington West Capital’s approach is to bring on a new team member, but wait to confer partner status. “This gives us an opportunity to assess the member’s long-term suitability,” Shewfelt says.
To assess fit, the firm conducts a series of interviews, at first one-on-one and then with the partners. “We particularly focus on the candidate’s style of business because we’re migrating to a fee-for-service practice,” Shewfelt says. To find out if this potential team member will put client needs first “takes some probing,” she adds. “Evidence will be the level of community involvement and personal and professional memberships and affiliations.”
When Plaskett’s staff provides him with a potential addition to their referral list, he contacts that person, gets to know him or her and broaches the possibility of working together. “This process allows me to identify top guns. Then it’s just a case of nurturing the relationship,” Plaskett says. He strongly recommends advisors create a database to track prospective service providers and any referrals exchanged.
The fourth step is the most important—taking a critical eye to the people you’ve met, looking at your list of needs, and ranking those people based on their ability to meet your needs and blend with your business.
“Finding partners was easy. Determining whether or not we were a good fit was more difficult,” says Peace. The senior partners at her firm are selling Peace their book, and she’s looking to continue with the partner-based model that was in place when she began working there in 2005.
For Shewfelt, competency and care matter. “There is a presumption of competency with the licensing in our industry, but that isn’t always the case,” she says. “With years of experience, you get to know who is good at the craft.”
Integrity, honesty and focus on client care are also high on her list of attributes. “Never putting our interests ahead of the client is an absolute,” she says. “The key to selecting good partners is to find those whose values you share. This takes time.”
Be sure to keep a file on potential partners with whom you’d like to keep in touch—the notes will serve as a starting point should you renew your search in the future. After all, the transitional nature of the industry will require bringing on new team members, and ultimately partners, who are experienced with the business requirements of the future, such as social media.
Finally, negotiate the relationship.
For a formal relationship, all discussions should be recorded. Consult a lawyer for your business before any agreements are made, and develop a formula for revenue sharing.
Negotiations are still required for informal relationships, such as an external supplier. In exchange for treating your clients like gold, what will you do? Plaskett suggests promoting your new partner to your clients in advance of the referral. “This process usually gets returned when we are then referred to others,” he says.
Be wary of entering into a referral-based arrangement that requires a certain number of referrals each month or quarter. Serving your clients—not meeting a referral target—is your goal.
In the event of a failed partnership, return to your original notes, see where you went wrong, revise your plan and move on.