The Big Lie of COI Referrals

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Several weeks ago I responded to an advisor’s question about increasing center-of-influence (COI) referrals. The advisor was frustrated that seemingly good relationships with COIs were not translating into more referrals. I received a response to that column from Scott Johnson, director of sales and marketing for My Perfect Client, a provider of training programs for financial advisors. Scott shared some interesting insights about his approach to COI referrals and I thought readers could benefit from these ideas.

There is an inherent disconnect in the referral model. In order for a COI to refer to an advisor, it implies that the COI can’t handle certain tasks for the client and must refer to an outside source. The COI is taking a risk by giving his or her hard-won client to someone else with whom there isn’t a formal relationship. In cases where a COI may feel some vulnerability with clients, or may need to expand the value-add, referring out to a third party is extremely difficult to justify. In other cases, a COI may not really know enough about the advisor and be confident enough to say that it is the “right” thing for their client.

Because of these factors, and more, Scott’s company calls COI-based referrals “the big lie.” The lie is that if you establish a relationship with a CPA or other COI, then because they know what you do and their client might need financial planning or advisory work, they will automatically refer. While many financial advisors spend the time marketing to COIs and even referring business at times, just as many do not have a reciprocal share coming back to their own firm.

My Perfect Client has a theory and an approach that if you, as financial advisor, can partner with the COI and actually get into their business, and help them run their business more effectively working with their clients to add more value, it’s a win-win proposition. It involves putting a team of people directly into the COIs business to “increase the brain trust” of that COI’s firm.

One of Scott’s clients, Anton Anderson, put it like this: “Perfect Client comes in and takes the current business model and presents a 180 degree difference. It puts me in a position where a COI looks at me as a business owner, and not just a salesman who they are going to potentially give a referral to, but we are going to build something together.”

In my consulting work I see CPAs and attorneys struggling to grow their business, gain referrals and offer the highest levels of client service and engagement. They have many of the same objectives for their own business, so the approach My Perfect Client takes makes a lot of sense. In effect the advisor is becoming a partner in the truest sense of the word, actually getting involved in the CPA or attorney’s business and helping them directly with their clients. The value of this accrues back to the COI, though, and indirectly to the financial advisor. But, the financial advisor clearly benefits because they do end up working with the COI’s clients.

In this model, the financial advisor is not the salesperson trying to sell either the COI, or their client. In fact, the CPA or COI never lets go of their own clients. Rather the advisor is working in partnership with the accountant or attorney working to offer an enhanced client experience. It’s a promising approach because it puts the advisor and the COI on the same side of the table where the advisor supports the COI helping them solve their best client’s biggest problems. An advisor works side-by-side with the COI, and does not go around them. This way the two are not on opposite sides hoping to entice one another into a referral!

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal,, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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