Get your COI relationship off to a strong start

“When you can serve your clients in more than one aspect, your client becomes more and more loyal,” says Gilbert, “and is able to refer you even more to his friends, his family, his connections.”

Getting the relationship off to the right start can help to ensure that your clients will receive the best service from your COIs, and that in turn, you are referred the right prospects for your business.

COI relationships are generally informal in nature, but the first meeting still needs to have some structure. This meeting will likely be framed in one of two ways, according to April-Lynn Levitt, a coach with the Personal Coach in Toronto. In the first case, if you and the COI have a mutual client, the meeting can focus on the services you provide that client and how that could extend to potential referrals.

The second scenario is a case where you do not have a previous connection to the COI. In that case, the meeting is likely to be more of a fact-finding mission, in which you talk to the COI about his or her business and how you might be able to help his or her clients.

As well, just as important as understanding the COI’s business is making sure that he or she knows what you offer clients.

“I’ve educated my centres of influence to know what I’m looking for so that I don’t get the wrong type of referral,” says Michael Newton, portfolio manager, director, wealth management, ScotiaMcLeod Inc., who has relationships with a number of COIs in Toronto. “There’s nothing worse than [a COI] sending me 10 people that don’t fit the program over here.”

In addition to explaining your business, you may also want to demonstrate how you can make the COI’s life a little easier in serving clients. For instance, if the potential COI is an accountant, you might bring a sample capital gains and losses report that you give clients to pass along to their accountants for tax purposes.

Says Gilbert: “What the centre of influence wants is first of all [to see] that you are professional [and] that you have a proven track record.”

In cultivating a network of COIs, it’s important not to take on too many at once. Sometimes advisors will have 12 COIs or more in a network, says Levitt, which can be difficult to manage, depending on the nature of their business.

Levitt recommends advisors think carefully about how many COI relationships they have time for, and to try to limit their network to around six. (Gilbert suggests focusing on one to three COIs).

Generally, these relationships will be based on two professionals referring business back and forth to their mutual benefit and that of their clients. However, there are some instances in which fees could take on a more explicit role in the business relationship. Sometimes in the insurance industry, for instance, an arrangement might be made to share a commission, says Gilbert. Any such arrangement, however, should be run past the compliance department first, as documents may need to be signed.

This is the second article in a three-part series on COIs.

On Thursday: Maintaining a network of COIs.