Identifying the key traits and characteristics that make a client a good center of influence

Identifying potential centers of influence is paramount among the various components contributing to a financial advisor's success, as it often depends on building robust networks and establishing meaningful connections. 

Jagannath Das, a nine-year MDRT member from Kolkata, India, defines a center of influence as an individual or entity that can guide decisions and sway opinions within a particular community or industry. He reckons, "Understanding traits that mark a good center of influence is crucial for advisors aiming to expand their client base, enhance credibility, and foster long-term success." 

Traits of a vital center of influence: 

Das argues that credibility is the bedrock of a center of influence. He says this credibility is gained through a reputation for trustworthiness and reliability. "Clients are more likely to take financial advice seriously from a trusted source. A COI with a respected body of work adds credibility and enhances the perceived reliability of the advice provided by the advisor."  

Das points out financial advisors should look for those with a solid track record of integrity and ethical conduct, as these traits build a foundation for enduring professional relationships. "Advisors must ensure the COIs possess a deep understanding of their industry or community, making them valuable sources of relevant information. Financial advisors can benefit immensely from aligning with experts in specific niches and subsectors. It can enhance the financial advisor's credibility and facilitate an informed approach to client interactions." 

Das reckons communication skills are crucial for effective COIs to articulate the value proposition of the financial advisor's services. Moreover, solid networking abilities help enhance active engagement within the community, forging meaningful connections that open up new avenues for the financial advisor. "Building relationships with COIs who understand the importance of strategic networking creates a mutually beneficial ecosystem that fosters growth," says Das.   

Building relationships with COIs 

Financial advisors should approach conversations with genuine curiosity and sincerity from the COI's point of view, according to Das. "From the outset, respect acknowledges the expertise and unique value the COI brings." 

In this regard, he says open-ended questions are crucial in understanding more about the person and their network. "Striking a balance between asking questions and sharing information fosters a more authentic and reciprocal connection. Understanding the motives of the COI is also essential to learn what propels and drives them, aligning goals for mutual benefit." 

Cultivating relationships 

Cultivating long-lasting relationships with COIs involves strategically planting the seed early and expressing the desire for clients to learn more. Leveraging shared contacts offers a natural connection point and emphasizes the common goal of supporting clients.    

Das offers an example: "I work mostly with small business owners, establishing connections with COIs focused on small businesses and informing these COIs about how I can help their clients. I have partnerships with prominent Chartered Accountants who advise small businesses. It is a win-win situation. The collaboration offers comprehensive solutions to meet the needs of small business owners." 

Demonstrating value is critical to the relationship, reassuring COIs that any referred clients will be treated well. The reciprocity reinforces the trust placed in the advisor by the COI. Consistency in communication and engagement beyond the initial meeting is crucial for building a lasting rapport and keeping the relationship robust. Das explains, "After a client referral, we tag the client in our Customer Relationship Management (CRM) system. Simultaneously, automated notifications are sent to the referring COI, informing them about every interaction. We also share detailed quarterly reports with the COI, fostering transparency and building confidence. It strengthens our relationship with existing COIs and encourages them to facilitate more connections." 

What not to do?  

While centers of influence are crucial for building networks, financial advisors must not assume COIs will automatically reciprocate favours. Instead, financial advisors should work on consistently providing value and building trust. Reliability is paramount, requiring advisors to follow through on promises and commitments to strengthen the bond with COIs. Balancing engagements ensures each COI receives the attention needed for a successful partnership. 

Expecting immediate referrals is a pipedream, as building trust and understanding takes time. Advisors must showcase the value of services and cultivate a strong relationship before expecting tangible returns. Providing an easy out for COIs needing more immediate referrals ensures a positive and respectful dynamic in the relationship. 

In financial advising, identifying, cultivating, and maintaining relationships with good centers of influence is critical. Advisors must understand the key benchmarks for evaluating the suitability of a potential COI, underlining the importance of a collaborative and mutually beneficial partnership.  

Through a nuanced understanding and implementation, financial advisors can elevate their professional standing and construct a network of trusted allies contributing to enduring prosperity. 


Contact: MDRTeditorial@teamlewis.com