Getting A Healthy Flow Of New Clients From Centers Of Influence By Addressing The Referral Risk They Fear The Most: #FASuccess Ep 447 With Dan Allison

Resources Featured In This Episode:

• Dan Allison: Model FA | Brokers Clearing House
• #FASuccess Ep 153: Generating More Productive Referrals By Closing The Gap Of Prospects Who Are Referred But Never Call, With Dan Allison
• Current and New Potential COI Feedback Scripts – Download (docx)
• Kitces Marketing Summit 2025
• Yes Money
• Integrity
• The Exchange

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Full Transcript:

Michael: Welcome, Dan Allison, to the "Financial Advisor Success" Podcast.

Dan: Thanks for having me, Michael. Good talking to you again.

Michael: I'm really excited to have you back again on the podcast to get to talk, I guess, again, a little bit about referrals. So, for those who are long-time listeners may recognize Dan had joined us many years ago on episode 153, so kitces.com/153. If you want to look up the prior episode where we were really talking in detail around how to get referrals from clients, like how to actually make referrals happen and why is it that we, a lot of us have clients that say they referred us, but then we didn't actually get a referral call. Like, how do we close that gap?

And today, I'm excited to talk about, I'll call it the other big referral source besides those clients that we serve so well, which are other professionals that our clients might interact with, or what our industry broadly calls centers of influence, or COIs for short. And to me, like there's an interesting power around COIs because there's always been, at least in my mind, a limit on client referrals, which is at some point, even if we're good at getting them to start doing the referring thing, they only have so many people in their social circle, their friends and family and colleagues circle. Before that well can just kind of run dry, they've referred all the people they know that would have a reasonable fit to work with us, and unless they move into new social circles, they don't necessarily have a lot of new people to refer.

Other professionals are different. They have their own steady stream of clients, and particularly in a world of some professionals, they have a pretty steadily rotating stream of clients and people that they're working with, which in theory makes even more opportunity to get referrals from centers of influence than it does from clients, and most advisors we find really struggle with this. Like, it's hard to actually get the other professional to refer to us. Either we're trying to make relationships. It doesn't seem to be going anywhere. I met someone. It seemed kind of promising. I've sent them three people. They haven't sent anyone back. And so I'm really excited to talk today about what it really takes to engage other professionals, to engage centers of influence, and really turn it into a mutually beneficial relationship. And what the heck it is we're doing wrong that I think so many have that experience. I sent them some people, they haven't sent me anyone back. I don't get how this works.

Dan: Yes. You summarize the problem perfectly.

Michael: I could hear you chuckle when I said, like, I sent them three people and they haven't sent anyone back. What gives?

Dan: I had an advisor, Michael, once say, I've been giving this CPA referrals for three years, and I've given him like 27 referrals. He's given me none. What's wrong with him? I said, well, what's wrong with you? There's probably a different question to be asking.

Michael: So in other words, maybe after the 24th, you should have considered giving up that it's probably not happening.

Dan: Yeah. Or at the very least, to be able to ask the right questions of the relationship to identify, are they looking at the relationship in the way that I am? I feel like a lot of advisors, they start the COI relationship under the false expectation of reciprocity. Like I'll refer to you, you refer to me, and it's often not the same on the other end of that. And it's the elephant in the room. We go to lunch, we have a good catch-up meeting, and then I stare at their name for another nine months figuring out how do I follow up? They're an elusive referral source for sure. But a great one when you nail them down.

The Risk Centers Of Influence Take On When Referring Clients To Financial Advisors [06:50]

Michael: So you highlighted in that context, and I mean, I sort of queued it up in the way I framed it as well. So much of this seems to be built around the idea of reciprocity. I'm sending them stuff. I'm hoping and expecting that they're going to send opportunities back. So, is that not even the right mindset? Is that not how we should approach this? Or is that the right way to think about it, we're just doing something wrong in the process.

Dan: Yeah. Well, and I'll take a little bit of a step back. Michael, you mentioned originally, when you and I talked, we were talking about client referrals. And we talked about over the last, I think, 22 years now, we've interviewed thousands of advisors' clients about referring. And we've also interviewed not thousands, but hundreds of lawyers and CPAs trying to understand the psychology of referring from the different perspectives. And it's interesting when you ask clients, “Hey, why don't you refer your advisor to more people?” Now you ask that after I've gotten positive feedback, and that their experience is good. But the answers are always simple, like, well, they've never even talked about it. They look really busy. I'm not sure who they would want to work with. It's all these basic little things. Privacy, I don't like talking about money or risk. If I refer and something goes wrong, that reflects badly on me. Those are pretty far down the list on client responses. But when you move over to COIs, and you ask, Hey, what is it that stops you from referring this advisor to more people? I'll bet you can guess, Michael, which one flips to the top. It's risk.

Michael: It's risk. I'm afraid to stake my professional referral on whether you're actually one of the “good guys,” right? One of the advisors that actually does the good things, and not one of the advisors that does the bad things.

Dan: Exactly. And so what we do is we approach COIs and we try to build relationships, and some advisors are strategic about it, but I think most are not. They kind of take a “play in traffic and see what happens” approach to networking. But it's like we've got this professional that we're hoping exhibits this behavior of referring their clients to us. But we're ignoring the elephant in the room, which is that that's risky from their perspective to do that. And how they feel about the risk depends on a variety of things that I have no control over. Their history, the one time they referred a massive client to this advisor and he completely screwed it up and they lost the big client.

If we don't know those kinds of things about how does this professional define risk when they think about referring back, I can't expect that there's going to be reciprocity if I don't understand those kind of things. And I find that if advisors will invest a little bit more time and be a little bit more strategic on how they approach these people in the first place, they're not going to go, “Oh, my God, every COI is willing to refer.” That's not the case. But what they will be able to do is say this one is not somebody to invest time in because they would not approach a relationship in the way that I'm looking for, which is reciprocity. Does that make sense?

Michael: It does. I mean, I'm struck as you're framing even having the conversation with this, I'm just going to keep calling them center of influence. I actually don't love that label, but it abbreviates down to COI, which is much easier than saying attorney or accountant every time. So I'm struck in your framing in this conversation with the COI that, yeah, they almost inevitably have some prior experiences, unless I'm just working with like a fairly young, new professional into the space, they have some prior experiences, and so for better or worse, they are immediately viewing my initiating this potential referral relationship conversation through the lens of whatever their past experiences are, which means if I don't open that conversation and find out have you worked with other advisors in the past? Like, have you had referral relationships with other advisors in the past? And find out what they say, then I don't even know what kind of baggage they're bringing to the relationship, what landmines are out there. I mean, it's very similar to many of us who do the same thing with prospective clients. Very common question, discovery meeting, like, have you worked with financial advisors in the past? Tell me about what worked in that prior relationship and what didn't work in that prior relationship. And you're trying to find out what they value and where they've had negative experiences in the past, so I don't do that again. Or I don't do that in addition to your prior person, that there's a very similar dynamic in place for centers of influence because the odds overwhelmingly are you are not the first person trying to start a cross-referral relationship with them.

Dan: Completely. And Michael, my background was clinical and behavioral psychology originally, that's all my formal education. But if you think about it, it's all relationship. And if somebody finds himself at 44 years old for the first time being divorced and being single and having to go out and build a relationship, whoever you're trying to build a relationship is bringing with them their experiences before they met you. And to ignore that doesn't make sense because that's how you learn what people respond well to, what things in the past you got to be careful not to do. So why would we look at COIs as a long-term relationship and not think in that same way? That I have to understand this person. I think too often I'm approaching COIs saying, look at my value prop. Look how different I am. Let me talk to your clients. It's like, well, pump the brakes, you'd have to have a pretty unique value proposition for a CPA to say, “Where have you been my whole life. Here's all my most important clients.” There's a lot of steps between there. And I think learning before we present what we do is critical in this space.

Understanding The Long Game When Kicking Off A Relationship With A Potential COI Partner [13:12]

Michael: So what are some of the other blocking points that popped up then as you did this research? When we're talking to COI ends. It sounds like risk is number one, right? At the end of the day, like I'm whatever, I'm an attorney, I'm an accountant, I'm a professional that has high esteem with the eyes of my clients, and I don't want to risk my reputation by staking yours. Unless I get to know you a whole lot better, because otherwise I refer you and I look bad, and I don't want to look bad for my clients.

Dan: Right. So my goal is I've got to be able to replace the risk that somebody attributes to referring with value. So if you think about, Michael, psychology 101, Pavlov's dog. The power of positive reinforcement is I know there's an element of risk in your mind referring people to somebody like me. Obviously, I'm subliminally thinking this through. But it's like my goal is to learn about those experiences and how you identify risk or feel about it, and value. I need to learn from you what that looks like. What does that mean? Do you find value in education for my industry? Do you find value in getting together once a quarter to educate each other? You keep me current on what's happening with taxation and the implications of tariffs or whatever, and I keep you... are you interested in that? Because they've got to tell me what value looks like and what risk looks like. So I can not demonstrate the behavior that they think is risky. And I can focus on the positive, which will just build trust and trust to the point where there's no risk anymore. But that can take years to build.

Michael: So how am I as the advisor, how am I supposed to go about figuring this out? I mean, is this just literally, I have accountants, I'm interested in who might be someone that I could do cross-referral business with, and my goal is to take them out to lunch and just literally start having this conversation?

Dan: Well, so number one, I'll make sure I get you a copy of a template, so the people listening will be able to kind of read the... because you said something important in there. Hey, I got this COI. I'm going to take them to lunch. Okay, then that's where advisors get to that point. But it's okay. And then what? Like, what's the outcome of that lunch? We approach it just as a get-to-know-you, but nobody is taking control over how the flow of that meeting goes. So you're both just kind of... and I think you should walk into any opportunity like that. Number one, what does success look like to you? What is the outcome that is measurable? That six hours from now, you can say that was successful or not. That's the first thing. Most people don't do that. To me, it is typically the next action being an additional meeting. If it's a first time I'm getting together with them.

Okay, so if my goal is second meeting, I'm going to go in there with that goal in mind, and I'm going to build that meeting to see, number one, do I want a second meeting? Because sometimes you meet them and you don't. It's not a good fit, and that's fine. But then, if the answer is yes, I want a second meeting, then I need to have a strategy to make sure I get to that point.

So, first thing I would do is I would reach out to them and say, as you know, I operate a wealth management company, or you may not know, depending on how cold that COI lead is. And all I'm going to do is say I come across clients often, obviously, that need tax planning work. And I like to form relationships to kind of get to know all the folks in the local market. See if you want to go to lunch, and I'll ask you a little bit about your business and who you work with. And of course, I'll share any of that with you as well.

So, number one, I'm setting it up, not with a false like, hey, I'm looking to refer people only to you, and you to refer people to me. But there has to be something in it for them as well. So as long as I do come across clients that need tax planning help, I'm not lying about that. So I want to set that meeting up. Then I'm having...

Michael: I noticed...

Dan: Oh, go ahead.

Michael: Sorry. Just quick question there. I noticed I don't know if it was deliberate or not. But just I didn't actually hear the word referrals in there. I mean, you kind of alluded, right? Like, I come across clients who often need tax work. I want to meet other professionals in the local market. So there's kind of an implication there. But that wasn't just a well, I get a lot of clients and I have to refer them out, so I want to get to know you and figure out if you're going to be my referral partner, like, that word, that infamous word of referral wasn't there. So is that intentional or just kind of an accident of how the language came out?

Dan: To me, oddly enough, as somebody who's known for talking about referrals, in most the language and most the coaching that we've done on how do you do this stuff, that word rarely does come up. It's framed differently, especially a COI early on. I don't want to even throw that word in there. I'm looking for somebody that maybe I could refer to and they could refer to me. To me, it's like, hey, it always is beneficial for me, and enhances my value to be aware of all the different COIs in the market and what kind of expertise they have, what background they have, you're going to call that favor in at some point if you have a relationship with a lot of people. So to me, it really is more exploratory. I want to learn about you, the business, who you focus on by doing that. They're talking about them, but they're telling me everything I need to know to decide is this somebody who might be a good fit for me based on everything they share. And that's not, by the way, I'm not doing that with the intent of a bait and switch. If I don't care about their service and what they do, then I'm being insincere. But if you're looking for a partner, I think those things are critical. So I go into it that way.

Michael: So, one more question on this, and I want to understand what comes next. But in that in that kind of mutual beneficial context, like, does that mean like, do I need to come to the table assuming that I can't have a referral relationship with the COI until and unless I've got people to actually refer out to them or said another way like, okay, so what if I what if I really don't have a lot of estate planning clients? Does that mean I can't talk to estate planning attorneys if I'm not going to have anything to send out to them in the foreseeable future, because then it's not a mutually reciprocal referral relationship?

Dan: I wouldn't look at it like that, Michael. I would look at it as I don't know when I'm going to run into that next client that does need estate planning help. But if you're going to be in the industry, it's going to happen over and over. So to me, it's like just kind of getting out and networking in the marketplace to be aware of my options when I want to be valuable to my client.

Now, my goal is also to learn about their clients and see if there's anything I can do that might bring value to whoever they work with. That's kind of a natural flow of the conversation, but I want it to be about them so I can learn, is it a good relationship? Is it a place that I would refer to? Is it a place I want a partnership with? And those things give me the answers.

Michael: Right. Because I do find that in that same manner, right, the number one reason that they don't refer to us is risk, that just I think a good reminder, and that cuts both ways. Right. I mean, if you're going to start a cross-referral relationship with another center of influence, you might want to get some handle on whether they're any good at what they do because that referral is going to reflect on you as the advisor who referred in that accountant or attorney or whoever it is as well. So there is also to me just an aspect of, yeah, we really are doing due diligence on the person we might be referring to.

Dan: Yeah, and Michael, that's subtle. What you just said is so subtle, but really important, which is, am I an advisor trying to get this appointment selfishly because I expect things from them? And partially if I'm going to refer selfishly, I do want value from them. But is this a one sided meeting where I'm truly going in, just hoping to get referrals from them, because if the answer is no. You're going to have to know all this stuff anyway. And I think starting their first impression of you, I was listening to a researcher and he was talking about a study they did, Michael, that they put these people on airplanes and they put a plant next to them, not a like tree plant, but like a person who was a part of the research study. And on half of the flights, the person who was working for the research company would strike up the conversation with the person next to them, but they would not offer up really any information about them. They turned everything back into a question for the other passenger about them. Meaning they talked about themselves the whole time. The other people, it was the opposite. They sat and said, tell me about you. But then they talked about them and their philosophies and their kids. At the end, the interviewers interviewed these people. And it was unbelievable. The data of how they just said, hey, we're doing some research for United Airlines, how would you rate your flight on a scale of one to ten? So they're focused on how did you like the flight? And the people that talked about themselves the entire time, it was like double in experience. Think about that.

Michael: Meaning like the passenger who got to talk about themselves, not hear the interviewer talk about themselves.

Dan: Yeah. They loved that person letting them talk about them so much that it made their flight great. So it's like the reason I named my original company Feedback Marketing is that I believe that there's a way to do both of those things simultaneously, where I am sitting with the COI that I'm marketing myself, but I'm doing it first by feedback. Because if my goal is to drive value to you or to be a partner to you, I have to learn from you first. Feedback is going to help me know how to market effectively to you. And I think if you start that way, it's a great first impression of the COI. It kind of puts you in control of how the meeting goes. And then I'm sure we'll drill into some details. But it makes that closing next action much easier because you're controlling the structure of the time.

The Key Questions To Ask When Meeting With A COI For The First Time [24:48]

Michael: So then give us a little bit more context on, I guess, the structure of this time for the first meeting, or what else I'm trying to make sure I cover. I mean, I think you'd open this up with right. I operate a wealth management company. I come across clients who often need tax planning work. So I'm trying to get to know other professionals in our local market here. So I want to go to lunch and ask you about your business. So I got the meeting. What else is on my, I guess, how am I time managing this meeting, or what other questions are on my agenda that I'm trying to get through in this first?

Dan: Yeah. So what I'm doing and the template that just so the people listening know, it'll have each of the questions I'm recommending. But I'm going to...

Michael: So...

Dan: Go ahead, Michael.

Michael: Quick note for folks, this is episode 447. So if you go to kitces.com/447, we'll have Dan's template in the show notes there. So either you can get it at the end, or you can pause this and go grab it and then bring it back if you want to follow along.

Dan: Awesome. Yeah. So I'm going to be showing up to the meeting. I'm letting the small talk naturally happen. But I know, again, if I just show up with no plan, it's going to be small talk and you're going to have constantly these little awkward kind of transition moments where you don't know where we're headed next. Are we talking about sports? Are we... and if I go in with the structure already built in my head, I know where I'm taking that transition moment. So I'm going to do the small talk. And then when there's a pause, I'm going to say, hey, like I said to you on the phone or via email, I operate a wealth management company and we help a lot of people, whatever your 30-second value prop is. And obviously, tax planning becomes part of all of our clients' lives. And so I like to get out and get to know the people in the marketplace and who they're working with and what their expertise is. So helps me bring value to my clients. And then obviously, if there's anything I can do to be helpful to you, I want to make sure you offer that up.

So, I would tell them, if it's okay with you, I'd love to learn about you and your company and your clients. And if you want to learn anything about us, happy to share that. But at some point, if there's something that we both agree might be valuable or helpful to you at the end, we'll just schedule a second time. And if not, no problem at all.

So I'm telling them, here's how the meeting's going to go. But I'm not pretending that I have a bunch of referrals. I'm looking for one CPA to send them to. It's like, hey, I'm out networking. I'm getting to know people. I, of course, want to bring value to them, too. Nothing wrong with that. That's business.

Michael: So, meaning as I'm kind of reading between the lines, like for some of us that do this and are just like really anxious to try to get referrals, we can unwittingly start over-promising or setting unrealistic expectations. Like, oh, my gosh, I really want something from this accountants like, hey, I've got lots of tax clients, I'll send them all to you. You'll be my exclusive referral partner if you'll just give me something in return. So as I'm hearing you discouraging, like don't do that to yourself. Don't set that expectation up. You don't need to set that expectation up. Just slow down a little and just try to get to know what they do and make them feel heard.

Dan: Exactly. I always tell the firms that we coach that don't even worry about COI referrals until you can honestly say you have a process that you implement, which is really important…I know you've done research in that area, that you actually implement, that generates referrals from clients. Don't even worry about COIs until you... because that's right there in front of you. And there are so many clients, Michael, trying to refer their advisor by, hey, I gave your name to someone. Go fix those problems, and you'll see a big lift in your practice. But then when you move to COIs, you need to understand it's going to be a very patient process. This is not one meeting, two meeting, and you're meeting their best clients. I would argue that's a red flag if that happens.

Michael: Okay. And again, for those who want the client referral and kitces.com/153, Dan was with us a couple of years ago. Not that I want to undermine the client conversation here, but we had an awesome hour and a half conversation there. So I'm going to keep us on the COI track this time.

Dan: Yeah. So I've kind of laid the groundwork, Michael, this what I'm hoping to accomplish. And then what I want to do is the basic so tell me about yourself, a little bit about your background how did you get into the industry in the first place? I want to hear about their journey. You know, what kind of clientele if you look at all the different clients you have today, is there any population that you say these are the ones I love working with or I'm really good at working with? I'm trying to get to understand where do they like spending their time in within the accounting world? Because if I do refer in the future, it'd be great to refer somebody who's the right fit that they really want to work with. It shows that I listen.

So I'm going to learn what do you think is valuable about what you do for that population? How do you set yourself apart? And then I'm wanting to know. So in the past, obviously, you've worked with financial advisors like myself in some capacity, whether they're referring to you or you refer to them. What kind of relationships have you had in the past? And talk to me about how you've approached those relationships, where you've been disappointed, maybe times that it didn't work and why. So then I'm going into their history... I'm starting with the history of them, and why do you like the industry, and who do you like to work with. Now I want to move over into collaborative feedback, trying to learn how do you collaborate with other financial professionals that together are supposed to be doing this very important job for people? And that's going to help me understand their philosophy of referring, collaboration, the past. And there's questions in there also, Michael, about specifically, have you ever had the confidence to refer a client to a specifically financial advisor? And if so, talk to me about the experience and talk to me about the positives and the negatives.

So you are going to drill down on very specific things. And it almost always centers around communication. The professional referred over and felt like they were in the dark. What happened to a client? Which is bad, even if the client has a great experience. But if something goes wrong, it's terrible that I don't know where the CPA is finally hearing what happened. And it's because of this. So I like to just go down that path. And part of the feedback also, Michael, is is there any topic in my industry, the wealth management space, that you find comes up for your clients or any topic that you would find valuable to be better educated at? Because if we do get together again, I would love to be, for the point, for me to be sharing things that you think are helpful and valuable. And I've got things I would like to learn from you. What I'm doing there is planting the seed for my next action is ideally a second meeting where we are mutually, I'm looking for mutual benefit, educating one another. I'm bringing some content to talk about specific to what they told me. “I hear this come up all the time, and I would love to learn more about how that works.”

So I'm coming prepared, and also I get to be taught by them something I want to learn that makes me more valuable. I find that the COI relationships that are very effective, high trust, consistent flow of referrals, the value isn't necessarily delivered at the client level. It is eventually, but it's on the professional level. I'm going to make you better, you make me better. Let's be smarter and more valuable together. Those are the best partnerships. And think about who fits into…if I'm looking for a CPA or an estate planning lawyer, who fits into that category? Well, if they're at capacity and they barely have time to keep up with all the clients they currently have, they're probably not real aggressive about learning and business development and getting better. So they're probably not a good referral source anyway. So you want to focus on somebody who's successful, but finds value in becoming better at what they do for their clients. They want their client experience to be better. They want referrals, maybe not desperately because they're good at what they do, but they still want to grow, they're business development minded. Those are going to be great partnerships for an advisor.

Michael: Well, I think there's a powerful point that's embedded into this that indirectly you made with the story at the very beginning of the advisor who had sent 27 referrals to the CPA over three years and hadn't received anything back. A part of this is not every attorney or accountant is going to be a good cross-referring partner. And that's okay. Don't even go in expecting it. Go in trying to figure out who will be so that you can put all your eggs in that basket, as it were. There's a ‘kiss a lot of frogs to find the prince' kind of phenomenon to this that to me is powerful because as you highlighted with the story earlier, for so many of us, we don't go and talk to ten CPAs to try to find two good ones that might be a relationship. We find a CPA who's willing to have lunch with us, and then we just start throwing referrals over the fence and hoping that something comes back.

Saying like, no, no, no, let's meet ten to find the best two that we think are a good fit. And then maybe we'll start trying to send some referrals over after we've already determined this is a person who wants to grow, is eager for a relationship, likes to collaborate with other professionals like financial advisors. We've screened some of that out with the kinds of questions that you're highlighting here.

Dan: Yeah, it reminds me of when my son was little on the playground, saying “That girl talked to me. Oh, my God, I have a girlfriend.” It's like, I'm not sure she's on that same page just because she talked to you. It's like the strategy has got to be exactly what you said, Michael. It's got to be strategic. It's got to be methodical, but it's got to be long-term. It's got to be which if you had a strategy that you implemented monthly to build out COI, were true relationships that are based on value delivery in the form of educating one another. You're emailing them content and white papers, but specifically on things that you know they care about because you've asked. They teach you about that. If you have a strategy for that and you fast forward it a decade, think about what that turns into over time. But you're looking to tip that “I think referring is risky.” You're trying to tip that scale all the way over to I will not let my clients talk to anybody but this advisor. That takes a little bit of time and constant communication to be able to pull that off.

Getting Referred Prospects To Communicate The Advisor's Value Back To The COI [36:38]

Michael: It's a really powerful mindset frame to go from the accountant that says referring is risky, referring to you is risky, to the other end which is oh I know Dan does such a good job, I'm basically not going to let my clients go to anybody but Dan because I know they're going to get the good outcomes from Dan.

Dan: Yeah, and you're not going to have a brochure that does that for you. You know what I mean? “Oh my god, your value proposition. There's no longer risk.” It's a demonstration of competency and trust, and value in the form of education. It's all these things. Oh, I want to give you a good example, Michael, and anybody listening to this. I can promise you, if you just take this 30-second thing and you implement it going forward, it will pay dividends. I can promise you.

So one of the things we talk about, Michael, anybody we coach is when you get a referral from a good client or a COI and you've got this prospect, and you meet with them and the meeting goes well and they're engaged, it's like hey this is an ideal potential client. They're asking good questions. There's value happening here. What happens a lot of times is afterwards the advisor might call the CPA who referred. Hey, I met with your client. Great meeting. Thanks a lot. Send them a coffee mug with your logo, whatever.

What we talk about is in that moment, you have to think a little deeper about what happened. So let's focus on a CPA-referred client to me. So when I meet with that client at the very end of the meeting, I'm encouraging everybody listening, every referral you get, if you end with this, hey, can I ask you, was this a good use of time? Was this helpful for you? I want the prospect to affirm yeah, hey, this was really informative. Appreciate all the information you shared, and all I'm going to do is say John, your CPA, he took a risk when he connected us. You're a valuable relationship to him. You're important to him. And if this was not a good use of time, if this was not helpful, that reflects badly on him. Would you mind letting him know it was helpful? I think he would appreciate that.

What happens now, Michael, going back to Pavlov's dog, now when that prospect who is what the risk is actually attached to goes back to their CPA and says, “Hey, I met with that guy, Michael. Oh super helpful, really informative.” Now that risk they attribute to the behavior was replaced by positive reinforcement, and they learned this is what happened. So I'll give you an example of this. I had a firm they had referred for three to four years to a CPA that had not referred anybody to them and so we were doing some work and what I did is I structured a thing that led to a referral from the CPA and at the end of the meeting with the prospect the advisor said that language. He said, Hey, can I ask, was this a good use of time, was this helpful? And that client had an opportunity in front of them. They're an executive at a big company, and they've got early retirement with some stock option buyout, and the person said, yeah, I feel like I finally understand what my options are here. And they said, your CPA took a risk and here's why. Well the next day that CPA called the advisor and said hey my client called me and raved about the meeting, said that you finally made it simple and the advisor said that I'm glad to hear that and they said, “I know you're busy,” this is the CPA talking now, “I know you're busy. I have two more clients at the same company in the same position. Do you have time to meet with two other people?”

And so it's like, tell me that would have happened had that prospect not gone back to the CPA. It wouldn't happen, but that little thing, and the advisor had a conversation with the CPA later about it, and the CPA said, “It's the first time I've ever heard an advisor acknowledge that it's risky for us to refer people.” Think about how simple that is but just to be able to tell a CPA, look, I know advisors probably meet with you and want referrals, and they... I understand it's risky. I understand in your mind if you refer a client and it goes terribly that's your reputation, I get that. My goal is to learn your past experiences with it to see if there's anything I can do to overcome it, that's my goal but you've got to tell me what those experiences are and help me understand. And if they're like “Never again, I've done this and here's what happened,” it's like okay. It's okay.

Michael: Yeah, it reminds me, we earlier this year we did our annual marketing summit, where advisors come on and share just marketing tactics they're doing and what's working for them and one of the advisors who joined us, a wonderful advisor up in Canada named Adam Chapman …and now like reflecting back, has an indirect version of the strategy which is after the first planning meeting with the client, when they're like really engaged and they're kind of like flying high into the process because they're feeling heard and discovered, he asked them to write a brief thank you card to the CPA or attorney or whoever it was that referred them, and just he's got like a really nice comfortable process about how he does that and makes it not awkward to just invite clients like hey, can we show a little bit of gratitude to the CPA Bob who brought us together because often people in that position don't actually get to hear how it turned out and since this is going so well, would it be okay if we took a few moments and wrote a thank you card to Bob for bringing us together.

Dan: I love it. I love that idea.

Michael: And he said it transformed his business when he did that. It was different than when right as you said, like that when we send the “Thanks, Bob, for the prospect,” and you include your coffee mug with the logo on it, it had to come from them. And the funny thing that he found, he tried a version that was... because he would just do this with like lovely little thank you cards from a local artist in the area that he would buy these thank you cards and he tried kind of like amping it up with like a fancier version with a little kit and it has logo on it and he said like the whole thing fell apart.

Dan: Yeah, too much. Yeah.

Michael: Yeah, because when he made it like his stationery and his stuff, it became really clear from the end CPA, that okay, basically like Adam put you up to this to send the thank you card when clients themselves just wrote like two or three sentences in a card that was literally handwritten by them, that just was like a nice artist-drawn thank you card. It just came across as very genuine authentic which it was, which is the whole point that it's meant to be inviting clients to do this, but now it is I'm connecting the dots back, like why did this catapult Adam's growth as he had shared it on the summit, it's this exact thing, he completely de-risked the CPAs when they get this letter from the actual client they referred that says, yeah I've been meeting with Adam, we've been having a great experience, thank you so much for being the one that introduced us.

Dan: And you know what other benefit there is, Michael? I love the personal touch of the handwritten deal. I think if it is delivered packaged with my logo, now you've gone into marketing. Now it feels insincere and calculated, but I love that simple card with the thank you but what you've also done, what that advisor is doing, you're conditioning the prospect and their understanding of what referring is. It is what you do to be helpful to people you care about. That's it. It's not about I get paid in two ways and I want to grow my business, or the greatest compliment you could give me, it's like, none of that. It's that's this is how that works. So a prospect's first experience after having been referred is going back to that person and thanking them, so now when I onboard that prospect three to four months later, I'm implementing some different language to move them further down that path of referring because to your point, a lot of advisors miss the idea that there's referrals right at the beginning of a relationship. I don't think you want to bug them about it and say give me five names and numbers...

Michael: No, no, you just give them a piece of paper and have them write it down.

Dan: Yeah. Write it down here. Old school. But it's like they're going through the onboarding because you've exposed them to something that seemed valuable enough for them to have hope about their financial future. They're excited, they're proud of themselves, they're making good decisions. That's a time where they're at dinner, saying “Hey, have you ever heard of this firm, Dan Allison Wealth Management? Oh yeah, we've been talking to them,” and it's like those are the moments where people will refer before you've even delivered value or what you would perceive as value. So anyway, I think that that's a powerful thing to do with those CPAs or COIs when they take the risk and refer, acknowledge it, make sure it's replaced with reinforcement.

Closing Out The Initial Meeting With A COI [46:28]

Michael: So now, take me back to my COI process. So we're getting through this first meeting, I'm asking lots of questions about them and what they do, and I love just how you set some of it up, like you've worked with advice in the past what kind of relationships have you had? How did you approach those relationships? Were you disappointed? Tell me more about that's like. We've opened that up. You had asked them about like is there a topic in my wealth management industry that comes up for your clients which I think to me like that's a fascinating way to open up. Do you have clients that work with people like me, but you're just starting with what things come up for your clients, and any topic that you would find valuable to be better educated in.

Dan: And Michael, what's important about that part of it, I'm not asking the question with the intent of what introduced me to those clients, I'm asking with the intent to provide you with information and value. You know what I mean? It's a subtle little thing but it's much more patient.

Michael: It's not, do you have any clients that work with people like me, is there any topic in my industry that comes up for your clients? They're still yours I'm not asking for them just tell me about topics and things that come up. So as I get to the end of this meeting I guess like help me close out this meeting. I'm presuming I'm trying to make some kind of evaluation of whether at the end of the day like they're a good fit that merits a second meeting, and then either I need to gracefully let them down if they're not or I need to ask them if they are. So help me walk through the end of this meeting and how to close it.

Dan: Yeah, in getting the feedback, if I'm determining like hey, this is somebody that I'd love to connect more with I instead of like waste of time right but if it is somebody that fits that, now all I'm looking for is ideally the topic that either hey I got a client right now who's dealing with this scenario. They're not referring you a client, they're saying, “What do you think about this current thing a client's going through, or a general topic. I keep hearing this come up, I'd love to understand that better.” That's all I'm looking for is that thing. So at the end of the meeting, I'm just going to say, “Hey Michael, like I said at the beginning, my goal is learn a little bit about yourself and who you help and then anything that you thought might be valuable, it sounds like better understanding this topic would be helpful to you, so as a next step, are you good if we schedule time and all come prepared to give you some more information, education on that and if you wouldn't mind I'd love for you to teach me a little bit more about X.” You know what I mean? So it's a mutual education session is my goal. Because if they don't want to learn anything from me, they're not interested in what we do. They're not going to refer. So that's the way I would approach that.

Michael: And how am I letting this meeting down if it's not a fit I'm getting? I have a terrible experience with advisors like you. I'd never referred anyone again. So, how am I getting down and not like burning a bridge?

Dan: Yeah, my next action just changes. It's “Hey, I appreciate the time today, that feedback is really helpful. I tell you what, you wanted information on this topic. I'll have my team get something together and I'll send it over to you and let me know if you have a question.” So my next action is now delivery of information not time. Unless they say, “Hey I want to get together with you,” then you have a decision to make.

Michael: Right. But in all likelihood if the reality...

Dan: That's not going to happen.

Michael: Yeah, I like how you said, I'll let my team get something together and send it to you, and then like let me know if you want to discuss it further because I already know from the conversation we had, you're not calling to discuss…

Dan: I'm putting the ball in their court. Whereas if it's somebody I want to meet with, I'm taking control of where that goes.

Michael: Okay.

Dan: Yeah. And so Michael, so think about the different populations quickly of COIs. So if I'm an advisor who attends networking-type events at the club or whatever, and I'm... a lot of advisors go to those things, and they're like, are these worth it? And the answer is yes if you're going in with a specific intention to those meetings. So it may be if I'm attending a networking thing, I'm going to look at who the attendees are, I'm going to request anything like that, they've got the attendees. I'm going to look up a few people, and I'm going to say, okay, I'm going to this thing, my goal is these two. I want to book coffee with those two. Now I'm going to the networking event with the definition of is this successful or worth it.

So I'm approaching them at some point striking up conversation and just saying, hey I really enjoyed the conversation, I'd love to hear more about what your firm does, the accounting firm, or estate planning firm and book coffee and now you're implementing what we just talked about. So now I'm going to the networking event with the intent of having the deeper dive feedback session and I'm having that with the intent of an education session. You see how each action you've already kind of got in your mind where you're trying to get it to go, but you're in control the whole way of is this worth my time to take it where I want it to go.

Setting Up A Regular Cadence Of Touchpoints With Good-Fit COIs [52:16]

Michael: So now take me to the second meeting in this process. So what comes next now as I'm trying to advance with this CPA that I did the initial meeting with and they want to learn some more things from me and I want to learn some more stuff from them, that's great but I do also eventually hope to get a referral so like just keep taking me forward of what what comes next here

Dan: Yeah, this is what I think separates a lot of people that are good in sales and myself because I just transparently say, nobody can control how many meetings it's going to take before a referral happens. If you're not willing to invest, if you're doing good work up front, you're learning about them, you're getting the right information, you shouldn't be investing time in a relationship that is not a good long-term thing for you anyway. So if it feels like a waste of time, “Oh I've met four times with them and got no referrals,” then you're not going into it looking at all the benefits. If you don't find benefit in having access to a CPA that is going to answer quick questions for you or have lunch with you and educate you and make you smarter, like those are all benefits as well, so I say that, Michael, because my recommendation is each step you're kind of repeating so now I'm in the meeting with them, prepared to walk them through the content that I promised to deliver, I'm asking them now to share their content. I'm seeing how prepared they are. I'm seeing how serious they take it, and if it's a good fit I want another meeting to... and at that point, I might say would you be okay if we once a quarter just blocked 90 minutes and did this. I find value in this if you do and so my goal is to have these quarterly meetings that are an exchange of information and education and what is currently happening that's related to our industry.

What happens though, Michael, is when you do that and you have multiple COIs that you're doing that with, you could be doing two or three of these meetings a month, and you're only holding relationships with eight or nine COIs total but what's going to happen is, “Hey I had a client the other day that came in and they told me that someone told them this, is that accurate?” That absolutely starts happening. That's how referrals will happen. There's not going to be the moment where it's like, “Hey, do you have anybody to refer me to?” Because we don't control when that feels natural in these kind of relationships, so it is very difficult, like I can package a client conversation. How does that go? What do you ask? When do you bring up referrals? But with COIs there's just too many moving parts to say...

Michael: Interesting.

Dan: Yeah, I can structure how you approach it and how you get everything you need to progress, but some of it's got to be improv based on the COI and how they're responding, how open they are. So it can be a couple of years before you see a good referral, it can be right out of the gate.

Michael: Interesting. So you're not... I guess that's a really striking distinction. You are really not setting this up in the direction of I'm trying to establish a mutually beneficial cross-referral relationship with a set number of attorneys and accountants or whatever it is. You're not going that direction at all. It sounds like this is very much simply in the direction of I'm just trying to create relationships with people that I can have some, I don't know, co-educational relationship back and forth where we teach each other and learn from each other because if I'm doing that with them on a regular ongoing basis for long enough where we're getting into real things that our mutual clients might be dealing with, it's just "inevitable" that at some point I've got a deep relationship where I'm a clear expert on this thing and they're just going to say like, “Hey, we were talking about that strange drawdown strategy from Roth accounts last month, I just had a client come in who had that going on, like, do you want to work with them and help them on this?” So you've been talking about it.

Dan: Yeah. And so what I'm looking for, Michael, is not saying I'm looking for a relationship that I refer all my accounting clients to, and then I want that back. I haven't found that to be a very good strategy. If the CPA firm is big enough and there's a lot of CPAs in a big RIA, but not like on the individual advisor level. It's kind of having multiple relationships, maybe this guy's a CPA but he focuses in tax planning. And this guy's more M&A activity. And that lawyer is an estate lawyer, and this one's a divorce lawyer, but I'm doing it, I know that the referral flow only happens when I have displayed enough value, competency for them to trust me. For them to decide, I would put my clients in front of this guy and he's not going to embarrass me. How long does that take? That's what nobody knows, but once it happens organically, then it just becomes natural, and that's why I'm not putting all my eggs in one CPA basket. I'm going to have those meetings with a variety of different professionals and then, Michael, what I'm doing in between meetings, I always tell advisors when you ask for all that feedback, who do you work with? What kind of clients you really enjoy? They're giving me the information I need for a drip email campaign as well because I'm only trying to maintain, let's say ten COI relationships.

Well, if I have information on each of them, what they care about, what they're interested in, and I'm not just doing it to kill time, I'm doing it to fill my spreadsheet of information about them. Once a month I just sit down, I block an hour and I say I'm going to touch each one of these COIs by sending them something that is either relevant to the topic, they care about the clients they work with, the vacations they love to go on, whatever it is and I'm staying in front of them in between in a way that is somewhat automated but feels very personal on their end. Does that make sense?

Michael: It does. You're talking about what we do to reinvest into a relationship and maintain a relationship so that that relationship is there, that feeling of comfort and trust, I know you, I like you, I trust you, so that when I've got a client situation I can actually see you being the one that works with my client to solve it

Dan: Yeah, if you think about it, I was having this conversation with my 21-year-old son who was talking about his social media, and it's so unhealthy, everything that it puts in front of him all the time. And I said, with these algorithms, you either are the person teaching the algorithm what to put in front of you or reacting to what it does. And if you react to what it does, it'll say Well, you like that, how about this? And it'll keep just creating a worse version of you, and you don't even know what's happening. Whereas if you're the one making the decisions, you can train your algorithm. All that algorithm is, is for marketing. It's for capturing attention, eyeballs, it is no different than I'm telling a CPA relationship if long term I'm going to try to bring value, and they teach me what it is, anything I put in front of them over time should feel like this guy gets me. Like everything I see is something I find interesting. They don't know that I'm cultivating that little library of things to put in front of them. They don't even remember telling me that they like doing this and that, but I'm using it. And I think there's not enough of that in our industry, just creative relationship management.

How To Determine When A COI Relationship Isn't Worth Maintaining [1:00:39]

Michael: So, is there some point where I cut bait? Like, how long do I keep going with the relationship, waiting for referrals?

Dan: Yeah, I wouldn't go more than a couple of years. Two, two and a half years, four or five meetings together, you should develop enough rapport with them by then to be able to have an honest conversation. To be able to say I... and I don't have a problem with it being an honest conversation at the beginning, look I'm looking for people that we bring value to one another but ultimately then we're able to help each other's clients. No problem with that at all. I just think if you go in unrealistic about your timeline of how quickly that happens, you're setting yourself up for disappointment. But if I've been doing this for two years, two and a half, and I feel like I'm the one working on the relationship, and I'm not... it all goes back to the same stuff. Relationship. I'm the one investing the time and the effort, I think you cut bait by saying that. By saying “Hey look, you know we meet once a quarter, I've found a lot of value in the information you've given me. Hopefully, you have as well. I think it's great if we share information back and forth, but at this point, I don't know that the quarterly meetings…”are just ended. It's not that big a deal. If they're not engaged…

Michael: We don't schedule the next one and no one really notices.

Creating “COI Mastermind Groups“ Of Curated Professionals In Related Fields [1:02:10]

Dan: Exactly. And so one more thing, Michael, just for the advisors listening. The other strategy we do a lot of coaching around is we call them COI masterminds, which it takes a little bit of organization but not a lot, where an advisor says, I want to put together little mastermind groups of people in the finance industry who operate with the same kind of clientele in different areas. So different COIs, right? So I'm going to be the wealth manager, I want an estate planning lawyer, a tax planning, and maybe a commercial P&C [property and casualty insurance] because they work with entrepreneurs or whatever. I find putting a group of like four together maybe five, is ideal and to say I'm going to identify people and I'm going to approach them and say hey, I'm looking to put together these mastermind groups where it would be one of each of us, and you explain what it is. Once a quarter, we would get together and meet and then you talk about the structure of the meeting, but really, Michael, what it is, is a group version of what we just talked about. The idea being each quarter a different COI owns that meeting. So I decide where it's going to be. Normally, there's an element of fun at the end like I just had one last week, do it at the golf course in the conference room, and then afterwards had a golf pro meet him at the range and they all hit balls, right? But I own this quarter, so I own kind of the agenda, but the agenda always flows the same. It is whoever owns the agenda will give a 20 minute presentation on content from their industry, the thing they're an expert in, that is timely and that they think the group would benefit from learning about.

So they're just kind of a key... here's what's going on in my world in my industry and what people are thinking about. After that, there's a little Q&A for the host, anything you want to ask, and then it's really a round table discussion where everybody talks about client scenarios but with the privacy respected.

“So hey, I came across a client, they've got nine businesses and, lawyer, what do you what do you think about this?” So it's almost like also a time to tap into the expertise of the collaborators for clients you're currently working on. Which once again that's where that referral opportunity happens. So it's not a tips group or any of the B&I kind of thing it's a highly focused, we're keeping this small, once a quarter we get together, make each other better, make each other smarter, problem solve client scenarios and if you think about that you can do multiple groups so you could have one that has a tax planning CPA and then again I could diversify over here and have in that group an M&A accountant. So I could have this broad network of COIs that I brought together, and so that's where the structure takes a little bit of work up front, but very high payoff long term. And it's the same thing. It's over time you display competency, value, they get to see does he show up on time? Does he contribute? Is he distractible? At some point they make a decision, “I would not be embarrassed if I put my client in front of that guy,” and that's where it happens. And then it becomes so it's... but if you really... you got to value the learning as well, because if you don't, it's like when is this going to turn into something, it's like that is the something. The referrals happen on top of that.

Michael: Well, and I'm struck in particular when you start queuing this up into we're actually sharing privacy-respected case scenarios like actual client things. Oh, I've got a client that got this weird thing with multiple businesses. Lawyer person what do you think about this and the lawyer starts putting ideas. It's like if the lawyer puts an idea that you like, it's going to be a couple of seconds before you say like that sounds like a really good idea can I just actually introduce you to my clients to say like what you've literally just said and the same thing can happen obviously in the other direction as well. I know they're bringing up things that pertain to what we do as wealth managers at the point I can put an idea on the table to say, Mr. or Mrs. Attorney, have you thought about this angle with your client and they like it then they're going to quickly get back to that one core question you raised earlier, will I be embarrassed to put this advisor in front of my client and if we've been spending a good amount of time together, educating each other, getting to know each other and I'm showing up well as a professional, at some point, I will have successfully worked through that blocking point and they will say like no I'm not worried I'm going to be embarrassed putting this advisor in front of my client like they seem to be quite good at what they're doing and now business is happening.

Dan: Yeah, and that's where you're going to have the CPA say “I had a client, he's got a big 401k for his company that he owns, and he was told that his fees are this. Have you ever heard of something like that?” Now I'm able to dismantle and say, well, if you do an analysis, you're going to look, then the guy's saying, “Hey, any chance you'd meet with the client or hop on the phone with him?” Yeah, for sure. That's how these kinds of things have to happen. In my opinion. I've not found anything that is a quick distance between a and b and COIs.

Michael: And is there still some point where, how do I want to say this? I guess I get to or I'm supposed to come back in and just highlight like, and by the way just like here's what I do and who I serve like I provide wealth management services to retirees within at least five years of retirement who have at least a half a million dollars or whatever it is. Like, does that still come up at some point? Am I still supposed to be saying that or putting that forth somewhere along this process?

Dan: Yes. Yeah, so how I recommend people do it is, I mentioned I'm old school, so I use Excel, like keeping a spreadsheet. Everything I know about them and everything I keep learning because what I'm doing every month, I'm looking at, hey, what could I send them that's valuable based on what I know they care about? So that might be a podcast, I'll Google a recent article, something like this, hey, I came across this, was thinking about you. So it just shows proactive and that you paid attention to what they care about.

But also anytime I do something for a client or I have a good case study, I think that's a great once a month every couple of months to say hey, we had a client scenario and I don't know if you have anybody in this circumstance but if you do I wanted to make sure to share it with you. And then you talk about the client came in, and this was a circumstance, and then because we found this now they're all better, so that person might think, “Oh, I've got a client like that.”

So I'm just subtly thinking, just thinking about you. Here's the information on the thing you care about, just thinking about you. We had a client that looks like this get this result, if you have anybody that fits that, we'll talk to them. To me, that's how I stay in front of them. It's individualized, it's consistent, but it's very manual, if you will.

The Types Of Professionals Who Make Good COI Partners [1:09:50]

Michael: And when we talk about COIs, at the end of the day, who goes on this list from your perspective? Who fits the COI profile?

Dan: Yeah, to me, I'm looking as an advisor I think too often we like CPA, lawyer, like we're too general. To me, I'm trying to think about who are the people that have influence over the kind of clientele I want to work with and that I'm good at working with. So they play in that kind of space but they're not transactional in the nature of what they do. So they have relationships with their clients, which means they derive revenue on an ongoing basis from the client which is great when it comes to the trust if they say hey go talk to this guy, but it also lets you know the risk is great as well so it just takes a little bit more time when you're partnering with somebody who has clients that are ongoing relationships.

One of the things, estate planning lawyers, Michael, when we interview them they often say almost all my business comes from referrals from advisors, so they acknowledge there's not a lot of people that wake up in the morning and say hey let's go get an estate plan done. It's normally directed by the advisor at some point to make it happen but also they acknowledge we don't have the deep relationships that an advisor might or a tax planning lawyer for an entrepreneur does, we do a transaction and if your estate plan is complicated maybe they see you more often than a normal person but still I don't have a deep relationship with my estate planning attorney. If he recommended a financial advisor, I'd be like I don't get it. So I'm looking at CPAs, I'm looking at M&A experts who deal in the entrepreneur space, and I'm looking for ones that entrepreneurs go to for advice well before they've decided to sell because I think the best time to meet entrepreneurs is before a liquidation event not after, so I'm looking at those kind of folks.

Commercial P&C agents, I think, are really overlooked. If they deal in the entrepreneur space, there's a lot of value you can bring. And the P&C firms, they can get big revenue off those entrepreneurs, and they talk frequently to them, so they do have better relationships than we would think. So to establish good relationships there makes sense too. So I'm looking for the influence they have, the ongoing relationship, and do they play in the space that I play in.

Dan's Coaching And Educational Offerings For Financial Advisors [1:12:40]

Michael: So, now take us back for a moment just for you, Dan. So, what would you actually do at this point?

Dan: What do I do for a living?

Michael: Yeah, do for a living.

Dan: God, it's a loaded question, Michael. Well, for a long time I owned Feedback Marketing Group, so consulting RIAs on business development and referral processes, but I acquired an insurance company called Brokers Clearinghouse six years, seven years ago. During COVID, we focused on building that. I had a lot more time on my hands because I wasn't flying around as much. We successfully sold that to an amazing company called Integrity, so I am currently managing partner of Integrity overseeing the operation of the insurance company, so we partner with RIAs, when they need insurance planning they come to our team. And then before COVID, I had merged with Model FA, which is a consulting company. I've always coached only on business development related to referring. So COIs, clients that's it, everybody I come across they have additional marketing challenges, website, how do we incorporate AI and social media.

So in merging with Model FA, I was able to round out a complete suite of resources from building out websites and marketing strategies. So I primarily oversee the insurance company and then I'm the lead for coaching on referral COI and client strategies.

Michael: Okay, very cool. Very cool.

Dan: And Michael, the one thing just for the listeners also, we have a platform called The Exchange, where advisors can be members. It's 99 bucks a month, no contract but it warehouses like all my intellectual capital as far as videos and trainings and scripts, and then a bunch of the coaches that I collaborate with in different areas have contributed a lot of courses as well so members get a lot of really awesome information education inside The Exchange, so if anybody wants to check that out they can go to school.com/exchange.

Michael: Awesome. And so I guess, how to help me understand The Exchange versus what you do with Model FA, as an advisor I'm trying to figure out which version of Dan I want.

Dan: I look at Model FA, our entire team there it's when people want personalized anything, from the coaching platform to the personalizing websites, marketing strategies, all that. Exchange is really a digital warehouse for education information and then a community where advisors can interact with each other, talk about what they're doing that's working and throw out challenges, that kind of thing, so it's much more digital versus Model FA's work is going to be much more hands-on.

What Advisors Misunderstand The Most When It Comes To Driving Referrals [1:15:47]

Michael: Okay. So as you reflect on all this, having worked with so many advisors on referrals over the years, what do you find advisors miss most or like misunderstand most when it comes to trying to drive more referrals?

Dan: Oh, man. It's been the one thing in my career that I wish I could like wave a wand and fix because it is the advisors that I see that really deploy good business models. And what I mean by that is they're comprehensive in what they do, they always put the client's needs ahead of theirs, they're not just selling something to sell it. They have referable business models. They have happier clients. They have clients who know people that need help. It's like they have all the ingredients but they typically are the least intentional about talking about referrals because they see it as salesy and I think a lot of that's just due to the old training that we all had and it's like I don't believe in trying to convince people who do not want to refer that they should, and you don't need to. Any RIA they've already got plenty of clients that are willing to, they've got a lot that are trying to, and it's like just having structured conversations that aren't around growing my business. That only happens after I have helped more people.

So the one thing I wish advisors could do is really just rewire their brain around their paradigm of the word and the topic, referring, because it's like clients are already doing it they're already trying it and they're not doing it for any reason having to do with us making sales and more money they're doing it because they want to be helpful to somebody and they believe you could deliver that. So if we could only look at it the way clients do, it is so simplistic. And if we can just have language and structure around what we talk about with these clients, we could increase their effectiveness when they decide to refer because right now advisors are not seeing even half of the referrals they could if clients were just a little bit more effective when they think, “Oh my friend needs help, I want to be helpful to them but I'm not just giving out my advisor's contact,” they won't end up getting help so I'm going to make an introduction via email, you know what I mean? To me, it's like if you have a paradigm shift that referring, talking about it is nothing salesy, then everything becomes really easy, Michael, and it's frustrating to watch the firms that deserve it the most talk about it the least because they're the people that deserve to help more people.

Michael: Because you frame it, again, to me you frame it in an interesting way because I'm not trying to push people who don't want to refer, it just recognize if I'm serving my clients well, the reality is a lot of them probably already are referring because they're just trying to like be helpful to their friend or neighbor or whatever it is, but they may not be referring well, they may not be referring effectively because we haven't helped them understand how you refer and what's going to happen when they refer and how the process is supposed to work and so they just refer badly and inefficiently and so the goal is not to turn non-referrers into referrers it's to turn referrers into more effective referrers.

Dan: Perfectly said.

The Low Point On Dan's Career Journey [1:19:30]

Michael: So what was the low point for you in trying to build a business of your own around this? Building the Dan business around referral marketing.

Dan: Yeah, the down thing that impacted me I think personally, Michael, and I'm sure you relate, having kids as well, is I sold my first company in my 20s and like lightning in a bottle, first time out as an entrepreneur and big company and I thought “I don't really have to do things for money ever again.” The next thing I knew, I was saying yes to every speech, every conference, and 150 flights a year was on the low end for me and it was miserable, man. I was away from my kids too much, and my family back home, and your life looks glamorous to other people, like, where to this week? But it's my god, you know the life.

And so I think the low point was realizing for me, which COVID did a great job of doing that for me, forced me to think about it, is like, I want to deliver value to people, and I have always thought I have to do that in person. Virtual is not my thing. I grew up with a dad that toured with the Grand Ole Opry, he was a country music singer and I grew up watching him on stage and I kind of always thought I'm an entertainer, it's what I do. I don't want to sit in front of a computer screen but then that low point of being like my alternative is to do this again and miss the grandkids and time with... so pivoting and doing some more virtual stuff has been a game changer because of the low point, so I'm actually grateful I had I had an audience of 1,000 people sing my kid happy birthday, Michael, because I was on stage on his fifth birthday. That moment was my low point but it's one of those weird things you're like, well, I gotta be out there because if I'm not, they forget about me, and then what? But it became this really unhealthy, just wanting to speak. Anybody who wanted to hire me to speak, and that was a recipe for disaster.

Dan's Advice For His Younger Self And For Newer Advisors [1:21:48]

Michael: So, what do you know now you wish you could go back and tell you from like 15, 20 years ago as you were starting to build in this direction?

Dan: Oh, yeah, it's funny because it's the same advice I give my kids and every advisor I've ever coached. It is a very difficult thing when you have to decide what am I worth? What is my advice worth? Because we were all raised hourly. I detasseled in a cornfield when I was 12 for 5.25 per hour, it's how you think, and all of a sudden, when people are saying like, hey, here's three million bucks, what do you charge me to manage this? Well, you can have all the great software and tools but at the end of the day you know what you're struggling with in your mind is what am I worth? And if I looked at charging $15,000 to give a speech at a convention for an hour, if you look at it like as an hourly rate it's crazy that's a lot of money but it's also like if you implement the things I'm teaching and the tools that come with it, it's a laughable amount of money. So to me, it's really do deep dives on your value and either come to the place that you're truly confident what your value is, and stand behind the fees that are aligned with that. Don't be scared to charge.

So many advisors that I worked with at the beginning of their career, they're like so nervous to charge somebody 500 bucks for a plan, and I remember the first time somebody told me they'd pay me $1,500 bucks for a speech, and I couldn't believe it. Little did I know I was leaving 15 grand on the table for that speech. I wish there was a way that early on know your value, charge accordingly, and deal with that awkward phase where some people say no because you charge your value. Because if you let other people dictate your value, the financial advice space, it's too broad. It's hard to commoditize. I know if I want to buy this product, the price differential, there's got to be value points to make it worth buying the expensive weed whacker, right?

Michael: Right.

Dan: Financial advisors aren't that, so if I'm going into it having no frame of reference for pricing in the marketplace and how that all works, I'm relying on you to tell me how that works. And I feel like advisors need to... the advice I wish somebody would have gave me is hey really think through your value and always be working to drive it higher but charge what you're worth or ideally some people would say charge a little more than your worth, what you aspire to be worth soon, that would be advice that could have helped me out a lot. I could have traveled less and made more money.

Michael: So, what other advice would you give younger newer advisors coming into the profession today?

Dan: Yeah, I always tell them I've never seen an industry that is more difficult to become successful, but so great to be successful. And it's like that first three to five years for a lot of them it's drinking through a fire hose and trying to build a business and you put your time in, but if you're an entrepreneur there's not a lot of industries that you can take so little risk and open your own company and be really lean and mean those first several years and the compounding in this industry, we apply it to portfolios, but when you look at business development, you can build such an incredible company over the course of 10 or 20 years just by staying the course. So I always tell them sell your shoes if you have to in those first three to five years but get there because it's a really cool industry, you get to be a partner with all these clients observing the highs and lows of their lives and you get to actually see the end result of your work in many different ways. And I think that's fascinating.

I would tell younger people and I do all the time, it's an industry that if you're willing to work hard and go into it realistically for that first five years maybe more, it's the best industry that I have seen. I've been involved in a lot of different ones. It's a cool one.

What Success Means To Dan [1:26:24]

Michael: So as we wrap up, this is a podcast about success and it's one of the themes that always comes up is literally that word success means different things to different people, sometimes it changes for us through phases of life, and so you've certainly built successful businesses with more than one actual build and exit, so you certainly have done the business thing successfully, how do you define success for yourself at this point?

Dan: I tell you, I was very fortunate to own a company and financially do well in my 20s because I bought all the dumb things you can buy. I built the 10,000 square foot house and had the multiple Maseratis and whatever. I went through all the things to buy until I realized that I'm trying to prove to other people that I'm successful. Because I don't believe it myself. Imposter syndrome, right?

And I tell young kids, I like to mentor, kind of that high school, college age, young men specifically, I help my son and some of his friends, and it's like when I ask them what does success look like when you close your eyes, they originally always tie a dollar amount to it. Or a material object. And when you really walk them down the path of okay, you got 50 million, now what? You drove the Lambo, and it doesn't give you that feeling it used to be, it's like there's this thing that you're a dog chasing the car, and the car stops, you catch it, and you're like, what the hell? I thought this would feel differently.

So for me, I used to define success in terms that were measurable, typically with money or material things and now I have learned that to me, everything that I do related to money is about living a life where I can provide a good life and great experiences for myself and the people I love. We just got back from Africa for a few weeks doing safari and doing really cool stuff, and all that money I used to think I'll buy fancy crap with, like...my definition of success is to be able to go where you want, when you want, and be able to afford to do it and bring the people you love with you, who maybe don't have the same level of achievement financially and you can provide them that experience. I think to me, that's success if you can do that.

Michael: I love that. I love that. Thank you so much, Dan, for joining us on the "Financial Advisor Success" podcast.

Dan: Good talking to you again, Michael.

Michael: Likewise. Thank you.