The Influence Of "Gatekeepers" On Advisor Referrals - Spectrem

Eliane Chavagnon

31 March 2016

(An earlier version of this report ran on Family Wealth Report, sister publication to this one; it is being run on this news channel because the issues in the report have far wider significance than for the US market alone.)

Referrals from accountants and attorneys are a key source of clients for advisors, so understanding how to get in front of these “gatekeepers” effectively is a task well worth carrying out.

At the same time, gatekeepers must ensure that the advisor recommendations they make are sound, and will not jeopardize the trust they have so carefully built with their clients.

Spectrem Group explored these issues in a recent report, entitled Centers of Influence: The Influence of Gatekeepers on Referrals and Wealth Transfer, which features feedback from interviews with 25 attorneys and 25 accountants. The report also draws on previous Spectrem research with millionaire and ultra high net worth investors.

Among the main findings, the frequency that gatekeepers refer clients to advisors ranged from a few times a year to over once a month; recommending between two and three advisors at a time was generally the rule, while referring just one was an exception.

Gatekeepers primarily refer advisors as a service to their clients, it emerged. “Some indicated they hoped it would be a reciprocal relationship where advisors would likewise refer clients to the them, but overall the focus is to be of service to their clients,” Spectrem said.

The preferred approach for gatekeepers to establish a relationship with advisors is “varied and often depends on the their personality,” with cold calls “rarely accepted,” according to the report. Gatekeepers tend to prefer that advisors have a common referral source, or an introduction to them, before discussing the client referral process, it added.

The report also noted that presentations are a good way for advisors to get in front of gatekeepers, and emphasized that a “personalized approach to business” is very important. Indeed, much of gatekeepers' business dealings are carried out face-to-face, it said.

Another key consideration is that accountants and attorneys often seek specializations from the advisors to whom they refer clients, Spectrem said. “Some advisors specialize in wealth accumulation and growth, others focus on one segment of investors such as retirees. Others have specializations in children with special needs. As advisors meet with gatekeepers, advisory firms need to highlight their specialized areas of expertise.”

The research firm acknowledged that developing a referral network of gatekeepers is a time-consuming and long-term process. It said advisors must work to quickly establish credibility with gatekeepers, and maintain these standards when providing service to mutual clients. And, while not every transaction requires a phone call, key information regarding taxes and estate planning should be shared as soon as possible.

Meanwhile, fiduciary advisors should highlight that they are fiduciaries with attorneys, while those who do not act as a fiduciary may want to focus more on accountants, according to the report. “Fiduciary services will become increasingly important in the next few years,” Spectrem said. (Indeed, the US Department of Labor has for some time been under pressure to update regulations in a landmark move that would require anyone or firm providing investment advice to retirement investors to do so as a fiduciary.)

Like advisors, gatekeepers generally would like to expand their client base too. “Gaining insights into the gatekeeper’s practice and target client profile will demonstrate an interest into referring the appropriate client to the gatekeeper,” Spectrem said. “Be sure to thank gatekeepers for referrals and touch base on a regular basis.”

The firm added in its report: “Ultimately, approach gatekeepers respectfully, understanding the high levels of knowledge they have in their areas of expertise. By appearing similarly knowledgeable and detailed in one’s own field, an advisor is more likely to gain a referral from a gatekeeper.”