Whether you are a multi-family office or not, the right outside partners can make a big difference in the extended service you deliver to your clients and overall success of your organization.
One of the greatest ways to grow a multi-family office is through strategic alliances, but if you do not stay involved with those relationships, there are bound to be problems.
“Everyone views their clients as their clients,” says Brett Van Bortel, director of consulting services with Invesco-VK Consulting, a presenter at the second annual Creating an Exceptional Family Office Experience conference in Boston.
But if you bring another professional or organization into the picture, it is crucial that you own the relationship and avoid operating on a superficial level with any partner.
“You have to have the ability to understand who you are dealing with in depth,” in order to become more effective at managing relationships, points out Russ Alan Prince of R.A. Prince & Associates, Inc, who hosted the event.
“If you are not running the process, it is going to run over you.”
Selecting a Strategic Ally
In picking the right types of alliances, Van Bortel notes that you need to be additive to their services.
It is also important to know if they already have a powerful alliance with a competitor. Ultimately it is important to determine if they have a willingness to refer.
It boils down to the fact that it is all about making your partners money.
“We want to find people that are in sync with what we want to accomplish. We don’t want to try and convince people,” Prince says.
Many existing alliances are not a win-win situation. If those relationships exist, they should be replaced.
Richard Flynn, a principal in Rothstein Kass, advises not being a bull in a China shop with ultra-high-net-worth clients, demand who they should and should not use.
However, if there is a skill set issue, point it out. Then the wealthy family will replace the professional, even if it is their own family member.
Prince insists that “The clients’ needs come first.”
Know Your Alliances Better
Through an exercise, Van Bortel makes it clear that the attendees know their clients much better than their alliances. However, these professionals are the ones that have the influence over the millionaires.
Over the lifetime of the relationships, a successful alliance can deliver 20 times the results of a client.
Through a show of hands, the attendees prove that they have not made a lot of best friends. That is because it takes time to invest in a deep relationship. To have strong alliances, it takes time too.
But Prince warns that while there is enormous promise in most potential alliances, they can also be a waste of time if there is not a good fit. His advice is to not try and convince them if they do not understand the potential.
Van Bortel admits, “It takes a lot of confidence to walk away and say ‘NEXT.’” However, often times it is the smart thing to do.
Building Strong Relationships
There is a checklist of crucial items an alliance must have, like a critical mass of similar clients and a willingness to refer. Even if they are willing, they often need to be coached into how to make successful relationships.
Van Bortel advises, “Begin to profile them. Market to their problems and goals.” Most in the industry over sell to these professionals, but it is more important to first connect on a human level. He asks, “What are the metrics they are dealing with? What are they struggling with?”
“Then we want to make sure we can follow up on it,” he adds.
By bringing value into their practice, deeper, more powerful relationships can be built.
Prince told the attendees to not be presumptuous. “If you do that, the relationship is dead in the water,” he adds. Know what is in it for them. To be more successful with alliances, they need to be profiled intensely to understand their business models, concerns and interests.
“Know how they make their money. Know how they work. Then, only then, you know what you can put on the table,” says Prince. “How are you going to refer them if you don’t know what they are doing?”
Mike Byrnes is a national speaker and owner of Byrnes Consulting, LLC. His firm provides consulting services to help advisors become even more successful. Need help with business planning, marketing strategy, business development, client service and management effectiveness? Read more at ByrnesConsulting.com and follow @ByrnesConsultin.
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