grow THroUgH sTraTegiC Broker-Dealer Guide / SourceMedia Marketing Solutions Group 10 aLLianCes By Jeanne Lee Three structures for relationships with external professionals
w hat financial advisor hasn’t tried to gain referrals by cultivating relationships with centers of influence, such as accountants and attorneys? Some succeed; many become discouraged. The thing is, CPAs, JDs and other professionals are frankly jaded from being too often solicited by advisors with the same idea. There’s a right and a wrong way to approach such relationships. “If you’re just in it to get a referral and then you move on, it’s going to fail,” says Trevor Emery of Wealth Strategy Partners, the subject of a case study below. Partnerships with external professionals work when the focus is truly on both sides serving the client—referrals will flow naturally as a byproduct. Read on for three stories that show how the right partnership benefits everyone involved. CaSe STudy One Perfect-Fit Partnership A deep alliance with an investment bank helped this group of four ex-Merrill Lynch employees go independent and grow their practice, Monument Wealth Management of the Washington, D.C., metro area, to approximately $250 million in client assets in just four years. What drove the relationship’s success? The investment bank was focused on the exact same niche: Business owners near a sale of their companies. The referrals flow in both directions, and no compensation or revenue sharing is involved. Tim Lee, managing director at Monument, and his partners were managing assets at the large wirehouse back in 2007, when the stock market first showed signs of cracking. The group of CPAs and CFPs, reading the warning signs in their firm’s financial results, started exploring their options—first looking at other wirehouses, then deciding to pursue the independent channel. By the time Bear Stearns collapsed and Wall Street truly faltered, they had made headway on their business plan, office search and tech buildout. They chose LPL <strong>Financial</strong> as their broker-dealer. In May of 2008, the wealth management team started to transition their book of business. Going down the list of relationships they hoped to keep, they realized that it was comprised of many entrepreneurs who were either preparing for, or had a liquidity event such as the sale of a company. “This led us to a niche that was fun for us, and would become our marketing strategy,” remembers Lee. Now business owners themselves understood that their clients—many of them in the government contract and technology space—have special planning needs that are underserved by the big players. Around this time, they were introduced to the investment bank, Kipps DeSanto, which specializes in companies in the $20 million to $500 million range. The seniors at the bank had come from a parallel background, having left a large firm to form their own business, and primarily working with entrepreneurs. “We are both tightly focused on that niche,” says Lee. When the bankers have clients who are nearing a sale, they recommend bringing in the financial planners. Likewise, Monument introduces its clients to Kipps DeSanto when they approach the stage of planning a deal. “We’ve known a lot of CPAs, attorneys and investment bankers,” says Lee, adding, “The best relationships are a two-way street.” Partnerships with external professionals work when the focus is truly on both sides serving the client— referrals will flow naturally as a byproduct. 11 Broker-Dealer Guide / SourceMedia Marketing Solutions Group
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