Financial planners as referral partners – making it work
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21/07/2010 9:14:00 PM
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Each agent has his or her own unique style when working with referral sources -- some work with an outside referral source, now coined the ‘old’ way of doing things, while others say they have adapted and changed with the times, using more modern methods they believe are better for attracting more clients.
How to find financial planner partners
Kristian Harris, mortgage broker at Monster Mortgage in Toronto, Ont., and his referral partner, Jim Helkie, financial adviser, Helkie Financial & Insurance Services Inc., in Toronto, Ont.,
have had a long and prosperous professional relationship for 10 years and it’s still going strong. Harris first met Helkie in his past job, where one of his roles was to go out and talk to financial planners at different office locations.
“I met Jim 10 years ago and just started explaining what we did. Obviously Jim was specialized in financial planning, insurance and investments, but mortgages weren’t a big part of that, so I became a resource for him,” Harris says. Even when Harris moved and left that company, it didn’t change their relationship.
“When Kristian left his past position and chose to go out on his own, I could’ve chosen not to do business with him. I didn’t even consider talking to his replacement because we had built up such a good relationship,” Helkie says.
Although, Harris and Helkie met through an existing business relationship, that's not the only way to foster working relationships. Chris Karram and Elisseos Iriotakis, for instance, met through their mutual love of sports.
For Karram, a financial adviser at Safebridge, Toronto, Ont., and Iriotakis,a mortgage agent at Safebridge Financial, Toronto, Ont., it was literally on the basketball court. They’ve been in a referral relationship for nine years and friends for four-and-a-half years.
“We met playing basketball and realized the industries we were both in,” Karram says. “One thing we did, even as we were just getting to know each other, was really become intentional with how to educate our clients, but we also educated each other on how to open up doors when sitting with clients.”
In 2005, the two started Safebridge Financial and their referral relationship has been one that basically wrote their business model for them.
“We were independent, so we needed to refer each other back and forth when we were at two separate firms. We realized the value of combining and branding under one roof,” Iriotakis says.
Safebride has two distinct operations: the mortgage side and the financial advisory side, both operating under one roof.
“We’ve actually branded the company as one and really try to provide big picture planning for our clients,” Karram says. “It’s important for clients to know that we have all this in-house, under the Safebridge group of companies, to provide them with this full package.”
Building the ideal referral relationship
The ideal relationship is built on trust. Both parties are expected to perform to the satisfaction of the client, thus ensuring positive feedback to the referral source, instinctively creating a loyal referral base and increasing their client base.
“When I give Kristian a lead, I expect him to call them back in a reasonable amount of time. I would expect him to give professional advice,” Helkie says. “The expectation is that Kristian is going to get 100 per cent of my leads - I’m not going anywhere else. It’s all about trust.”
“At the end of the day this is not about one or two mortgages, it’s about a 10-year relationship and it could become a 20-year relationship,” Helkie says. “The trust is that Jim knows I‘m going to do the best for his clients, and any feedback he gets, I’m hoping is always positive, whether I do a mortgage or not.”
There are no referral fees exchanged between the two, so the relationship is truly built on a strong foundation of trust.
“It’s not about fees; it’s about doing the right thing for our clients,” Kristian says. “And if I do the right thing for his client, as has happened over the past 10 years, I’ll keep getting referrals, and that’s the important thing.”
Since mutual trust is the success element for these two, it’s something that takes time and a lot of work to build up.
“The relationship we developed took five years before it turned into a partnership. It started in the basketball court and from there led to coffee, or dinner, a drink, meeting each other’s clients and working one-off deals to the point where you’re very purposeful in doing business together,” Iriotakis adds.
More than just a referral
The model used at Safebridge Financial was built mostly on the concept of Karram's and Iriotakis’ relationship. They learned that what they had was unique and started matching up their employees using personality profile tests.
“We have agents on the mortgage side, agents on the financial side and we’re partnering them up under the same philosophy and they’re doing the same thing Chris and I have been doing for years now, it’s just that it’s all in-house,” says Iriotakis.
They are also a hiring a recruiting agent for both sides to help facilitate them in building their own independent relationships with an in-house adviser. “We profile all our agents and then try to pair them up with the right individual on the other side,” Iriotakis adds. “The more we know about the agents we hire, the more capable we are of connecting them with someone who they’ll actually fit with.
Moving into the 21st Century
Canadian First Financial Centres is a new and modern way for mortgage brokers to deal with a client’s every need. The more modern way for mortgage brokers to conduct business is by keeping all the services under one umbrella and providing a ‘one-stop’ shopping experience.
Karl Straky, president and CEO of Canadian First Financial, believes that the ‘old’ referral system of sending your clients to an outside source no longer works.
“In the old days, which for the mortgage industry was 10 to15 years ago, we used to refer to outside sources and they would refer back to me. The problem is I don’t think that works anymore.” he said.
A mortgage broker can own his own business and also own a Canadian First. It can be compared to the Tim Hortons and Wendy’s partnership. The mortgage broker, instead of sending the client somewhere else to get extra service, could open up a Canadian First Financial Centre, giving them the ability to offer a full range of services in one visit.
“About four years ago I saw that mortgage brokers needed to start helping clients with other challenges in their lives such as saving enough money for retirement, finding a way to put their kids through post-secondary education, or finding ways to take advantage of these new tax-effective ways of savings, like opening a tax-free saving account.” Straky says.
They started opening branches in 2009 and currently have 14 branches across Canada.
Value Proposition
Mary Gronowski, regional manager with Mortgage Intelligence in Mississauga, Ont., encourages her agents to formulate a value proposition before approaching any referral source, filled with added services that would spark an interest in setting up a meeting to discuss the potential relationship further. She and Lisa Jones, mortgage agents with the Hachey Ross team of Mortgage Intelligence in Toronto, Ont., are two colleagues who came up with the value proposition plan.
Example of a value proposition plan:
Financial Advisers - Value Proposition:
1. Client Retention. Banks aggressively cross-sell their products and financial planners run the risk of losing existing clients when clients go to their bank for a mortgage. Since mortgage brokers have access to non-bank lenders that do not offer investment products, they help financial planners retain their clients in the long run.
2. Mortgage Strategies that help clients build an investment portfolio through their Financial Adviser. As a mortgage professional, you can help clients refinance their mortgage for debt consolidation purposes saving them hundreds of dollars every month by reducing their monthly debt load. Financial advisers can then take the monthly savings and build an investment portfolio...i.e. RESPs for their children, etc. .., creating a win-win-win situation.
3. Referral Fees on all mortgages that close. Diversify your income stream by offering another product to clients through a reputable, professional company, and earning a fee for every referral.
4. Many financial advisers are also licensed insurance agents, and every mortgage lead is a potential insurance lead for the financial adviser.“Have a game plan ready of what ‘value added ’ proposition you can bring to the financial planner. How can you differentiate yourself so that they want to hear what you have to say and want to create an environment where a relationship can start.”