Five COI mistakes

But just like working with clients, managing relationships with COIs takes planning and effort. These relationships can sour if not properly cutlivated.

Here are five mistakes advisors make when dealing with COIs — and how to avoid them:

1. Putting new business before your existing clients
Think about your network as a client strategy first, says Littlechild, and a business-development strategy second.

For example, instead of thinking of a COI only as a source of referrals, she says, consider how that COI can help your current clients with the various aspects of their finances.

2. Finding a bad fit
Not every professional will be a good fit for your business, says Littlechild. You need to find someone with similar service standards and whose business is compatible with yours. For example, look for someone with a similar business model, personality or client profile.

Do a little research to find the right COIs to work with.

3. Failing to define specifically your ideal client
Constantly turning away referrals — because they don’t fit your client ideal profile — can derail a new relationship with a COI.

Be clear from the start of the relationship with a COI about the clients you serve, says Joanne Ferguson, president, coach and consultant with Advisor Pathways Inc. in Toronto. Otherwise, if you frequently turn away referrals because they don’t fit your business, the COI will be less inclined to recommend to you the clients you do want.

4. Working without a plan
You should have a process in place for maintaining a relationship with a COI.

You need clearly defined steps showing how you and your team will manage the relationships, Ferguson says. For example, specify how often you will contact the COI, who will maintain the relationship and who will set up a meeting to talk about your business process and clients.

As well, Ferguson recommends, be specific about the results you expect to see from that relationship, such as gaining a certain number of new clients, or increasing assets of existing clients.

5. Starting with a sales pitch
Instead of “pitching” your business to a COI, start the relationship with an open discussion about your business and the mutual benefits of working together.

Having a conversation, rather than a “sell,” Littlechild says, will make the potential COI more comfortable and it will help ensure that you find the right person for your business.

For example, Littlechild says, you might call a COI to say: “I’m building a network of professionals and I want to talk to people whom my clients can trust. I would love to get together to talk about whether there’s an opportunity to work together.”

This is the first of two articles on working with COIs. Next: Creating a long-term COI strategy; and how many COIs is too many?