Multiple Financial Advisor Referral Relationships May Be a Big MISTAKE!

multiple-financial-advisor-referral-relationships-phil-kaveshBy Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law

Does that sound crazy to you? Probably! But, hear me out.

(By the way, if you’re a financial advisor, what I’ll say applies equally to you having too many estate planning attorney relationships.)

Over the years, I have consistently heard fellow estate planning attorneys tell me all of the reasons why the dedicated, single-financial advisor referral relationship (or a relationship with only one company or group of advisors) that I use in my practice doesn’t work or why it won’t work for them.

The most common reason why so many estate planning attorneys don’t believe in a single financial advisor referral relationship is because their practice has been largely built on client referrals from several financial planning professionals. They fear that singling out one financial advisor for partnership will wind up alienating the other advisors and cut off potential referral revenue.

While you may potentially sever ties with some financial advisors when you establish one, dedicated financial advisor referral relationship, I (and others who have successfully utilized my approach) actually wind up generating more overall revenue!

Here are just a few reasons why.

REASON #1: Your Practice Becomes Dependent on Too Many Referral Sources Who Don’t “Have Their Bread Buttered” By You!

Referral sources expect to see some referrals in return. When you have multiple referral relationships, you are obligated to spread your referrals around between them. As a result, no one referral source gets a steady enough stream of revenue from you to keep you “top of mind” and send all of their referrals to you, either! Worse yet, it’s difficult to maintain close relationships with numerous advisors and when they have no close allegiance to you they may wind up referring their (and your) clients and prospects to someone else who “butters their bread” (and all of a sudden your revenue will drop!).

REASON #2: You Can Save a Lot of Time (and Money Too).

It’s difficult and time-consuming to establish contact with numerous financial advisors, court them, develop working referral relationships, stay in close communication with them and then continually follow up and iron out the kinks that prevent those relationships from becoming really successful. (Just think of how complicated and exhausting trying to maintain multiple marriages with multiple spouses would be!) Maintaining these multiple financial advisors referral relationships can also be expensive, not only in terms of your own time (that could have been billed to clients), but also in staff time to take care of all of this marketing, courtship, coordination and follow-up.

Plus, what you will find is that a single financial advisor relationship – – whether the advisor also works exclusively with you as his or her estate planning attorney of choice – – will save you marketing time and expense. For those who do seminars (or other marketing), you can spend the time to sell the other’s services. And the one not doing the seminars (or other marketing) can help share the costs. (By the way, if you’re an attorney, the financial advisor can pay for some or all of your marketing costs, both legally and ethically, provided you do the proper client disclosures.) This kind of cross-selling and expense-sharing only makes sense for both professionals when you have an exclusive, higher volume cross-referral relationship.

REASON #3: Having Multiple Referral Relationships Might Be a Disservice to Your Clients.

What do I mean here? If you’re working with multiple financial advisors, it’s much more difficult to monitor what they’re all doing with your clients and to develop a closely coordinated working relationship on all of your joint cases to be sure your clients are being properly and timely serviced.

Plus, if you know one advisor is better at some task or has more expertise in a particular area than another, but you refer a client to another advisor, are you opening yourself up to client discontent and even a possible lawsuit? You can give clients multiple names of advisors if you feel more comfortable and protected, but at the same time, highly recommend the one, close advisor relationship where you explain to clients that you do regularly monitor and help control the process and results. In fact, one close advisor relationship is better for your clients.

REASON #4: You Can Generate a New, Steady, Increasing Stream of Virtually Passive Revenue.

Financial advisors are compensated much differently than estate planning attorneys. A lot of estate planning attorneys work on a fixed fee basis and the business is transactional. You quote a fee, you get paid your fee, you complete the work, and you’re done. Some attorneys have on-going maintenance plans that bring in some annual revenue, but, for the most part, it’s still transactional because you have to continue to deliver more services and products for the maintenance plan fees.

Most financial advisors are now compensated by what is known as “management fees”. The more money they manage, the more they make. It’s not dependent on the number of transactions with each client (or number of client cases) and these fees continue from year to year so long as the advisors do a decent job of maintaining the clients’ confidence.

Where I’m going with this is that there’s a huge amount of potential revenue that you, that estate planning attorney, might be enjoying now and in the future if you took the time to establish a more permanent and dedicated referral relationship with a single financial advisor and agreed to split a portion of the money management fees – – which can be done both legally and ethically.

Okay, You Might Be Thinking…

“Wait a minute Phil, I’ve got multiple financial advisor referral relationships and they work for me!” or “I have no interest in sharing marketing time and expenses or splitting the financial advisor’s revenue.”

That’s all right. I am not telling you to throw away anything that you’ve tested and proven to work for you and your practice. If you’ve developed your practice with multiple financial advisors and it works for everyone involved – – you, your clients, and your multiple financial advisors – – then, by all means, keep doing it. And, if you don’t feel comfortable about sharing marketing expenses or the financial advisor’s revenue, that’s okay too.

But, what if I could show you how to just tweak your existing referral relationships and make them way more profitable (even without splitting marketing expenses or financial revenue)?

Time and again, I have found that estate planning attorneys greatly benefit from learning the details of the financial advisor two-way referral relationship system that I have developed and successfully implemented for over 40 years. Chances are, you could too.

If you would like more information about how we are currently helping estate planning attorneys and financial advisors successfully develop this type of symbiotic referral relationship, send a quick me a quick e-mail and we will determine if we are able to assist you!



philip-kavesh-authorAttorney Philip J. Kavesh is the principal of one of the largest estate planning firms in California – – Kavesh, Minor and Otis – – which has been in business since 1981. He is also the President of The Ultimate Estate Planner, Inc., which provides a variety of training, marketing and practice-building products and services for estate planning professionals.

If you would like more information or have a question for him, he can be reached at or by phone at 1-866-754-6477.

Image courtesy of iosphere and AKARAKINGDOMS /


  1. Ronnie Stutes

    In Reason #2, you write: “Plus, what you will find is that a single financial advisor relationship – – wither the advisor also works exclusively with you as his or her estate planning attorney of choice – – will save you marketing time and expense. Whomever of you does seminars (or other marketing) can spend the time to sell the other’s services.” Did you mean “whether” instead of “wither” and “Whoever” (subjective case — subject of the sentence) instead of “Whomever”?

  2. Jayden William

    Thank you for sharing this valuable information. Finding a financial advisor is not that easy but with the help of referrals, you can easily get the best financial advisors.


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