Building relationships with financial advisers often comes down to the perfect phrase

Leon LaBrecque, managing partner and founder, LJPR LLC

As published in Scotsman Guide's Residential Edition, March 2009.

Almost all mortgage professionals understand the value of referrals, especially referrals that come from influential sources such as financial advisers and certified public accountants (CPAs). Earning these referrals, however, is the hard part.

It doesn’t have to be that way.

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With some carefully crafted dialogue, brokers can earn financial-adviser referrals through the art of conversation. Referrals born from dialogue are sometimes called “relational referrals.”

Here are a couple of commonly heard phrases and some ideas for responses that could ultimately help build referral relationships.

• “This stock market stinks.” Rather than simply agreeing with someone who states this, mortgage brokers can offer some market insights. You might, for example, point out that some financial advisers think that now is a good time to move portions of taxable Individual Retirement Accounts (IRAs) into Roth IRAs. The thinking is that any appreciation will be tax-free when the market turns around.

• “My stocks are way down.” Sure, brokers can sympathize. You also can take it a step further by mentioning some of the tips you’ve picked up. For example, you might know a financial adviser who thinks it’s smart to harvest losses in order to achieve a taxable loss.

It’s critical that mortgage brokers tread carefully. Actually providing financial advice is not permitted for brokers who don’t have proper certification.

Instead, speak generally and ask questions. The questions you ask will vary depending on who the conversation is with. For example, it might be wise to ask a CPA a question such as: “Do you think that’s a good idea?”

Let’s presume the conversation is with a CPA and that the CPA thinks that the idea is good. The next step is to turn the conversation into a mutually beneficial opportunity. You might do this by saying something such as: “If I ran into someone who needed the tax aspects of this figured out, could your firm help?”

The key here is to offer to provide a referral. The CPA with whom you are speaking is almost certain to accept any new business. Even if not, the CPA likely will know a peer looking for new business.

When you talk to CPAs and others with whom you hope to form referral relationships, wording and tone of voice can mean everything. Search for the perfect phrase that fits your style, breaks down walls and avoids language that makes listeners feel as if they’re about to hear a sales pitch. The idea is to be innocuous and disarming while also requesting assistance and inspiring collegiality.

One phrase that tends to work is, “Let me run this by you.” Start there and tweak the verbiage until it suits you.

When you consider which of your clients to send to your referral partners, listen for clues about how much familiarity clients have with their own financial situations. The more they wonder about making smart financial decisions, the more likely it is that they could use the services of a financial adviser.

Here are two popular mortgage questions, each of which might indicate a client’s need for professional accounting advice:

• Is now a good time to pay off my mortgage?

• Is now a good time to refinance?

Because there are no straightforward answers to these questions, mortgage brokers must be wary of providing financial advice. If you do decide to send the clients to one of your referral partners, don’t be surprised if you soon receive a referral right back. Savvy businesspeople understand that one good referral deserves another -- and that returning referrals is an important aspect of establishing a win-win relationship.

Leon LaBrecque is the managing partner and founder of LJPR LLC, a firm managing more than $300 million in assets. He has provided integrated, comprehensive financial-advisory services to thousands of people for more than two decades. LaBrecque is a practicing attorney who specializes in financial planning, estate planning, and business and tax planning for individuals and businesses. Reach him at LeonL@fin-ed.com.