The Prospecting Professor

Strategic Alliances

Yesterday I discussed the value of "networking like an attorney", and provided a example of how an advisor could form a Strategic Alliance with an attorney. In my specific example, I used an attorney who specializes in commercial real estate transactions.

In the first place, how do you find attorneys and their specialized practices? The absolutely best resource to find any attorney is the Martindale directory. With the Lawyer Locator, you can find attorneys by their firm, area of practice, name, geography, etc. Moreover, the background information that Martindale provides on each attorney is extraordinarily detailed.

But, let's get back to the concept of forming Strategic Alliances. Strategic Alliances allow advisors to think bigger and more, well, strategically. These alliances can be created to support any niche group or target market that you wish. Typically, to the extent that advisors do form Strategic Alliances, CPAs and attorneys have been the principal partners. However, networks can also be formed from any one of the following:

1. Experts from the industry, lifestyle, or special interest group that you are targeting.

2. Suppliers to the industry, lifestyle, or special interest group.

3. Editors and Publishers of trade magazines, journals and newsletters that support your target market group.

4. Associations that support your target market.

Strategic Alliances allow the advisor to move beyond the image of "peddler" or "product-pusher". Strategic Alliances position the advisor as a valuable resource who clients turn to with questions, challenges, or the need to get a second opinion. If an advisor aspires to be a resource on issues that transcend financial matters, it is important to weave a network of individuals who can support your clients on a variety of topics, in a variety of ways.

Network Like an Attorney

Many attorneys face the same challenges that advisors do in growing their business. All attorneys are instructed to grow their practice through networking...yet not all attorneys are naturally good at networking.

Networking is using the personal relationships other people have with one another to increase exposure to information and opportunity. The power of networking is in the relationships that others have, i.e. it's not who you know, it's who THEY know.

Networking is more than opportunistically whipping your business card out at cocktail parties. Networking is cultivating relationships with people who are in contact with large numbers of people who are constantly in contact with large numbers of people in your target group. These relationships are carefully chosen and continually maintained to assure that your contact will refer a client if the opportunity arises.

Most importantly, networking is bilateral and mutually beneficial. Unilateral relationships where one person always has their hand out is not networking...that's BEGGING!

For example, here's how an attorney who specializes in commercial real estate transactions will strategically build their network. Mid-size businesses are, most likely, the ultimate target. Who are the persons who would know about commercial real estate transactions early on in the process?

Lawyer Contacts: Real estate Litigators, M&A Attorneys, Securities Attorneys, Tax Attorneys, and Estate Planners. Non-lawyer Contacts: CPAs, Commercial Real Estate Brokers, Management Consultants, Venture Capitalists, Commercial Bankers, Business Brokers.

Here's a thought. Find an attorney who wants to grow their commercial real estate practice. Call them up, and arrange to meet for coffee. Discuss how to create a strategic alliance that networks with the contacts described above.

Isn't this better than cold-calling attorneys off of some list with some lame product pitch?

CPAs as Financial Planners...and Competitors

It seems that, at one time or another, every financial advisor has attempted to network with, or seek referrals from, CPAs. In the future, this may not be a productive referral source.

In the February issue of the Journal of Accountancy, you will find an article authored by Barry Menlancon, the president of the American Institute of CPAs. He notes that an estimated 23,000 AICPA members provide personal financial planning services, and 15,000 are NASD-licensed to sell insurance products. There are another 60,000 CPAs who are providing limited personal financial planning services as an extension of their existing practices. Moreover, recent surveys indicate that personal financial planning services are one of the fastest growing sources of new and recurring revenues for CPAs.

On the one hand, this may indicate that advisors should heed the investing public's desire for objective personal financial planning. On the other hand, advisors should be wary of CPAs who offer competing services.