How Insurance Agents Can Rely on Referrals From Financial Advisors

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  • We’ve already established that referrals are integral to the success of independent agents. Referrals from local banks, builders and interior designers are just a few examples we’ve discussed in the past. 

    But another relationship that can be mutually beneficial is one with financial advisors. When agents network with financial advisors to tag-team a customer, they can both offer comprehensive products and services to cover all of that person’s needs. 

    Here’s how this type of partnership might work, how to build trust with financial advisors and how to fully leverage these relationships. 


    Two Examples 

    First, let’s provide a bit of context to better understand the role financial advisors can play in helping their customers find relevant insurance coverage. 

    Say a financial advisor is helping a customer with tax optimization for a business they own. They would ensure the customer meets tax requirements and help them figure out what their federal and state tax obligations are, explains the team at Blisk Financial Group

    Or perhaps the advisor is helping them figure out what kind of home they can afford to buy. In this case, the financial advisor would help the customer determine how much house they can afford, educate them on maintenance costs and prepare them for increased taxes, says personal finance writer Zina Kumok

    Both of those, the house and the business, are insurable assets. If the financial advisor has a reliable insurance agent available, they can work together with the customer to make sense of financial obligations. For the house, the advisor might suggest buying homeowners insurance, which typically covers things like weather-related damage, water damage, fire damage and theft of personal property, writes Kevin Mercadante at Money Under 30. 

    For the business, they might recommend purchasing a business owners policy, which covers both property insurance and general liability. It protects the insured from a variety of issues including personal injury, equipment breakdowns, fire, income loss and property claims.


    How to Leverage Relationships with Financial Advisors for Referrals

    How can you get to the point where you transcend surface level interactions and get a financial advisor to send you referrals? How can you ensure they send relevant leads? And how can you nurture that relationship long-term?

    financial advisors

    Make a Strong Effort to Build Trust 

    For starters, it’s necessary to establish a base level of trust where there’s a transparent and honest relationship, according to UpCounsel, an online marketplace for legal services. You can’t realistically expect for a financial advisor to send you qualified leads if they don’t genuinely trust you and know you’ll provide professional service. 

    After all, a bad customer experience from an insurance agent they recommended could negatively impact them and hurt their reputation — especially with so many people voicing their opinions on social media and review sites. 

    Of course, building trust doesn’t happen overnight. It takes time and has to happen organically. “Creating strong business partnerships is an unending process which requires endurance, consistency and determination,” notes social media specialist Virginia Van Kampen. “Practice relationship-building regularly, and be conscious to keep your own attitude and behavior in check.”

    Building trust takes effort, writes Paul Dughi at the Business Relationship Management Institute. Be authentic, attentively listen and show that you have a legitimate interest in the needs and goals of the financial advisors you partner with. An independent agent can demonstrate this interest by providing the financial advisor with updates on insurance industry practices or laws that may affect their customers.


    Be Clear About What You Want

    It may not always be comfortable asking for leads from a financial advisor. You certainly don’t want to sound pushy or give the impression that there are ulterior motives behind your relationship. 

    “But in order to get what you want, you have to ask for it,” says journalist Samantha Harrington, cofounder of Driven Media. “It’s better for the other party too because they don’t have to guess what you need and the relationship is more open.”

    You can’t just assume that a financial advisor knows you want them to send you referrals. To fully leverage your relationship, let them know you would appreciate any leads they send your way. Be clear about it, and say that it would be a huge help for growing your insurance agency. 

    Also, let financial advisors know who your target audience is advises the team at ThriveHive, a marketing solutions platform for small businesses. That way they’ll be more likely to mention you whenever opportunities arise.

    financial advisors

    Outline the Specific Types of Coverage You Offer

    Another big part of ensuring these relationships are fruitful is letting financial advisors know what lines of insurance you sell and how they tie into their offerings. Any confusion here can limit the efficiency of the referral process, so you should be specific about your policies. 

    Perhaps the best way to go about this is to plot out some common scenarios and figure out exactly how a certain type of insurance coverage can benefit an advisor’s customer. Going back to our example of a financial advisor helping a business owner optimize their taxes, the logical type of coverage to suggest here would be business insurance that protects customers from major financial losses. 

    General liability insurance may be a good option too because it covers losses from physical injuries that occur on a business property, explains Priyanka Prakasha, J.D., senior staff writer at small business loan comparison site Fundera. Or a financial advisor may want to suggest commercial property insurance to customers with brick-and-mortar locations to cover their property from theft, vandalism and weather-related damage. 

    If you live in an area prone to a particular kind of natural disaster, this could also be something to mention in your outline. For instance, much of the west coast faces an ongoing threat of earthquakes, according to Policygenius insurance editor Pat Howard, with California and Washington state being especially vulnerable.

    Earthquake coverage isn’t usually included with standard homeowners insurance, says insurance writer Janet Hunt. So, you may want a financial advisor to discuss the importance of this type of coverage to both business owners and homeowners. 

    You don’t want to overwhelm an advisor with a myriad of different policies, but it’s important that they have a basic understanding of what you offer so they’ll know how to base their approach. 


    Send Referrals to Financial Advisors as Well 

    Just like with any other type of thriving relationship, reciprocation is vital to maintaining quality business relationships, notes Jennifer Spencer, founder of Energent Media, a digital marketing firm for the blockchain space. 

    You should never find yourself in a situation where it’s a one-way street and a financial advisor is sending you a steady stream of leads but you’re barely sending any their way. It should be a two-way street where both parties win, says B2B sales executive Richard Banks

    Therefore, you should get into the habit of sending referrals to financial advisors whenever possible. 

    Again, you’ll want to come up with a handful of scenarios where it would make sense to point an insurance customer to a financial advisor. Maybe you have a high-end customer who has turned to you to insure something expensive like a yacht or a personal plane. This type of person would have a lot of money invested, and there’s a good chance they would be interested in a financial advisor if they didn’t have one already. So, this would be the perfect time to refer them to someone you trust. 

    While a financial advisor referring a customer to an insurance agent will probably be more natural, you should always be on the lookout for moments where you can refer your customers to a financial advisor — an act that will help strengthen your relationship. 


    How to Capitalize on Connections with Community Partners

    “Success in business is not a solitary affair,” says communication strategist Baishali Mukherjee. “The knowledge of partnering with other businesses is the driving force in making companies flourish.”

    And this is certainly true when it comes to building a thriving insurance agency. Given that referred customers result in an average of 16 percent more profits and18 percent lower churn than non-referrals, according to Chris Duskin, vice president of marketing at referral marketing platform Extole, building business partnerships should be a top priority for independent agents.

    Financial advisors can be a particularly beneficial partner in your community and can play a key role in growing your agency. Following the tips mentioned above should help you forge these relationships and get quality leads coming your way.

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