James Sullivan
Asking for referrals is the wrong approach for elder care planners

Help clients and others keep you in mind when the time is right for a referral.

December 2, 2013
by James Sullivan, CPA/PFS

CPAs who focus their practice on the financial planning needs of elderly clients, especially those with chronic illness, can tap into a growing market that is being fueled by the aging of Baby Boomers. But developing such a specialty requires that practitioners stop trying to be all things to all clients. And it also means taking a new approach to an old marketing strategy: Referrals.

Stop asking for referrals

Do you still ask for referrals? At the end of a meeting, do you ask your client for the names of friends, relatives, or co-workers who your client thinks may benefit from your services? Like most financial advisers, you probably dislike having to ask for referrals as much as your clients hate hearing you ask for them.

To make matters worse, this outmoded process yields few real prospects. In his book, Stop Asking for Referrals, financial planner Stephen Wershing points out two of the major weaknesses in asking for referrals:

  1. You are asking your client to sell for you. How enthusiastic are you about doing someone else’s selling when there is no benefit to you?
  2. A client is often referring you to a friend or colleague who is unlikely to be in need of your particular services at the time. Such an individual is unlikely to be a very good prospect. Most often, it turns out to be a waste of time for both you and the prospect.

The best referral is made at a time when the prospect is most in need of your particular services. Instead of asking for names, a better approach is to focus your practice narrowly and teach your clients what problems you help people solve. This improves your chances of being top of mind when your client encounters a friend or colleague who is struggling with those types of problems. Wershing explains:

“Attracting referrals, then, becomes largely a matter of training clients to remember to mention you at the right time. It’s all about helping people to remember when they can benefit from mentioning you. It’s not about giving you names when you ask; it’s about remembering to refer you when the opportunity arises, so you have to prepare clients for the opportunity to refer.”

With a growing population of seniors, many of whom have at least one chronic illness, the need for specialized financial planning for elder care is greater than ever. There is a learning curve, and experience delivering such services helps differentiate practitioners. As CPAs’ expertise in this area grows, they will not need to ask for names of referrals—but planners will still need to market their services. The groundwork can be laid by educating clients and local elder care professionals on the planners’ service offerings.

What’s in it for me?

Planners’ chances of a referral are greater when clients meet a friend, relative, or colleague who is struggling with the type of problem the planners’ services address. In the case of the elderly, it is rare that CPAs encounter someone who does not have some experience with a family member needing care for a chronic illness. (Often it is a type of dementia such as Alzheimer’s disease.) As the discussion progresses, the subject of finances and concerns about planning for the cost of the disease come up. This is the perfect time for the client to mention the planner’s practice focusing on the special financial planning needs of the chronically ill elderly. That will be the right referral made at the right time.

How does the client benefit from making a referral to you? Referrals are “social currency,” which Wershing identifies as a “way of expanding influence.” John Jantsch writes in The Referral Engine: Teaching Your Business to Market Itself that making a referral to help someone solve a problem has value:

“Being recognized as a source of good information … is a great way to connect with others. … Making referrals is a deeply satisfying way to connect with others. … I think the growth of many popular social networks can be traced to the fact that people love to connect and form communities around shared ideas.”

The care of a chronically ill loved one is one of the most important issues that family members have to address. While the family and the health care professionals focus on the immediate care needs of the patient, the CPA planner can focus on the long-term financial planning needs: How will care be paid for? What financial resources are available? How long will the resources last given the projected care needs and cost? How much of the cost will be paid by Medicare or other public programs such as Medicaid? Can family members afford to contribute?

The CPA/PFS financial planner can pull all of this financial information together and assist the family with planning. The knowledge and skill planners bring to these families has real value. Clients and others familiar with a CPA’s work will be happy to make the referral because they understand the importance of what the planner does and the planner will be “top of mind” when they hear someone discuss the care needs of a chronically ill family member.

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James Sullivan, CPA/PFS, is a financial planner in Wheaton, Ill. He specializes in working with clients, and the families of clients, suffering from chronic illness.

The AICPA’s PFP Section provides information, tools, advocacy, and guidance to CPAs who specialize in providing tax, retirement, estate, risk management, and investment advice to individuals and their closely held entities. All members of the AICPA are eligible to join the PFP section. For CPAs who want to demonstrate their expertise in this subject matter, apply to become a Personal Financial Specialist credential holder. Forefield Advisor, a highly valued resource of section members and PFS credential holders, is the perfect tool for communicating concisely and clearly with your clients and remaining “top of mind” on your areas of expertise.

Join us at the 2014 Advanced PFP Conference on Jan. 20–22, 2014, in Las Vegas. Gaining referrals is one of many marketing ideas covered in Sunday’s pre-conference session, “Marketing and Advisory Systems You Can Use Next Week That Will Save You Time, Reduce Stress and Bring in More Business with Less Effort.”