To advance your business to a higher level of success, there is one step you must take: Create strategic alliances with other professionals who serve the affluent. There's simply no better strategy; these referral alliances can help you make huge strides in terms of revenues, profits, business valuation and even overall enjoyment of your career.

But you have to do it right.

Properly done, these alliances can offer an advisor a steady stream of prequalified clients, while other professionals increase their revenues from their current client base by getting a share of the advisor's revenues. Mutual clients gain by getting comprehensive wealth management delivered by trusted professionals.

Most advisors are aware of the opportunities that strategic alliances present, yet few report having success in this area. Many advisors simply lack the right process for creating great referral streams. How many of you have taken a CPA or an attorney to lunch and thought you'd formed a great new venture - and then never heard from the person again?

Just how valuable are these professional alliances? Consider that 61% of advisors surveyed by my firm, CEG Worldwide, said their five best new clients were the result of referrals from other professionals. That's far better than referrals from existing clients, which were cited by just 23.4%.

A study by Russ Alan Prince offers more information from the clients themselves. The majority of affluent investors - 54.2% - said they found their primary financial advisor through a referral from a CPA or an attorney. That's hardly surprising. After all, CPAs typically are investors' most trusted advisors. So if you don't learn to collaborate with these professionals, half of your marketing opportunity is gone.


Then why do so many advisors report that it's a struggle to work with other professionals in ways that result in referrals and more business?

For starters, more advisors are approaching CPAs and other professionals than ever before. One CPA we've worked with said he was contacted by 14 advisors in the past year who were looking to share referrals. That alone makes it tough to stand out in a crowd.

Worse, when advisors get in front of other professionals, they tend to go on at length about how great and unique they are. But to other professionals, these advisors all look and sound the same. Couple that with the widespread distrust that lingers from the last financial meltdown, and you understand why CPAs and others say "no thanks" to the many advisors courting them.

The fact is, without a compelling reason to provide you with referrals, there is nothing to create a binding, lasting relationship. You need some sort of economic glue, such as a revenue-sharing agreement, to hold an alliance together, creating a vested interest for both partners.

Here's how a revenue-sharing agreement might work: Accountants commonly get a 25% share of any gross revenues generated. So take a potential partner CPA firm with $2 million in annual revenue. One rule of thumb is that, for every $1 million of accounting revenue, a CPA's clients have about $100 million in assets that could be converted over a five-year period - so that would suggest that this firm's clients have about $200 million in assets available for conversion.

If the advisor captures all of those assets and charges a 1% fee, that would generate $2 million per year - at a 25% revenue share, such an arrangement would steer $500,000 of that back to the accounting firm.

Ultimately, strategic alliances work best when they're designed to enable you and the partner to serve your mutual clients better than you were serving them before you joined forces. Such alliances help clients benefit from both your expertise and that of your partner, as well as from the fact that you and the other professional are working together to solve your clients' needs from a holistic perspective - maximizing their chances of reaching their goals.


As with any important venture, success comes from being deliberate and systematic. I recommend a five-step process.

1. Hold exploratory meetings. You don't need 10 alliances with so-so professionals - you need one or two ideal partners. If you are looking to partner with a CPA firm, for example, consider firms with about $1 million to $6 million in annual revenue. Firms larger than that tend to have so many partners that it may make it tough to get them to agree to an alliance with you. Interview a few prospective partner firms, asking about the key services that their clients are asking for. Emphasize the importance of integrity and competence. Explain how you and the professionals would work together collaboratively, and discuss how they would get paid, so they understand what a relationship would offer.

2. Brainstorm together. If you decide to go forward, meet again to gather additional insight and information about the firm. Conduct individual interviews with each of the decision-makers at the potential partner firm. While you may think that you gained a clear picture of that firm from your exploratory meeting, remember that every influential person there may see the firm differently. It's important to understand these perspectives to gain full support for the strategic alliance. If you still see substantial promise, find out whether there is sufficient commitment from the initial decision-maker to continue to pursue the relationship.

3. Develop a strategic action plan. Work collaboratively with your primary contact at the potential partner to develop an action plan for the alliance. It should spell out your process for working together, describe the business challenges facing the potential partner (which you've learned from the first two meetings) and explain the benefits of an alliance. Outline ways your firms will work together: how you will address existing business challenges, generate strong revenues and help the partner provide better service and results to their clients. Finally, specify your recommendations for launching the strategic alliance and bringing the partner's qualified clients into your process.

4. Present the action plan. Present the strategic action plan to the decision-makers you met during the brainstorming meetings. Make sure you present it with your internal champion beside you; delivering the plan together will help you get firmwide buy-in. If you work as part of a team of advisors, consider bringing one or more of that group to this meeting. Your potential partners - especially cautious CPAs - will be reassured that you've got a team behind you.

5. Hold ongoing meetings. This is an alliance - not a one-off transaction. Have biweekly or monthly meetings to ensure the action plan is being implemented satisfactorily. Confirm that you are on track with the activities you've committed to and discuss any obstacles. You can note specific accomplishments and review any client cases if needed. Also discuss any opportunities to improve and grow the strategic relationships. Such follow-up is essential to ensure that mutual trust remains strong.

Strategic alliances can be game changers for your business. Advisors in our firm's coaching programs who have built strong alliances now have tens of millions of dollars being transferred to them. But to succeed, you've got to be focused and methodical in your approach, and you've got to show potential partners how they will benefit by entering into an alliance with you. Do all that and you, your alliance partner and your clients will all be able to benefit.


John J. Bowen Jr., a Financial Planning columnist, is founder and CEO of CEG Worldwide in San Martin, Calif., a global training, research and consulting firm for advisors.

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