Build a Trusted Referral Network to Better Serve Clients

If you are a sole practitioner or owner of a smaller firm, it is not uncommon that your clients will ask for help in areas beyond your scope. This column shares how practitioners can build a network of trusted referral partners.

If you are a sole practitioner or owner of a smaller firm that primarily focuses on tax, audit, or advisory services, it is not uncommon that your clients need help in areas beyond your scope. This is when a network of trusted referral partners not only adds value to your service but also strengthens client loyalty and enhances your reputation. You want your clients to view you as a well-connected resource.

Begin by reviewing your clients’ past conversations, emails, or common issues. You may find the more typical areas include:

• Estate planning and legal advice.
• Financial planning and wealth management.
• Insurance.
• Payroll or human resource services.
• Real estate or mortgage services.

The key is to identify professionals whose services are most aligned with your clients’ needs.

Here is some guidance on how to identify, connect with, and maintain relationships with referral partners to better serve your clients.

Leverage Your Existing Network

You likely already have clients or acquaintances who are professionals in the fields that other clients are seeking to connect with. Identify attorneys, advisers, or bankers and ask if they are open to a reciprocal referral relationship.

If you’re missing some service providers from your client list, reach out to professionals you’ve worked with on shared clients in the past. Build these relationships intentionally by focusing on those who are service-oriented, reliable, and trustworthy. Be sure you have something to offer them so the relationship is a two-way street.

Expand Your Network

If your network still needs some maintenance, consider attending Chamber of Commerce events or local business networking groups. Also, scour your Linked-In connections and find out who they are connected to. Ask your connections if they are willing to facilitate introductions. You can also leverage LinkedIn to search for professionals in your geographic area and industry. Look for those with shared connections or overlapping client bases. Use Facebook as a networking tool as well. Facebook groups often have referral threads that may contain a trove of valuable information.

Be active in your local professional society, such as the PICPA, and volunteer for thought leadership or governance committees.

Vet Potential Referral Partners

Your reputation is on the line with every referral. Before recommending anyone, understand your potential referral partner’s business philosophy, process, and client service model. It doesn’t have to be a formal interview; a casual coffee meetup is a great way to get to know someone.

Test the relationship by referring a low-risk client first, and monitor the feedback. Share expectations, especially around follow-up, client communication, and reciprocity. I can’t stress this enough, though: avoid quid pro quo arrangements that could breach ethical guidelines.

Formalize the Relationship

Many referral relationships are informal and based on mutual goodwill, but formalizing a partnership can offer clarity, reduce misunderstandings, and create a more strategic, long-term collaboration. Depending on the nature of the relationship and the industries involved, there are a few ways to formalize an arrangement, but a referral agreement should include three items:

• Disclosure requirements: investment advisers and attorneys must comply with legal and ethical rules.
• Compensation structure: if referral fees are allowed, define the terms.
• Client ownership: state who manages the client relationship and how leads are tracked.

Events are a great way to deepen a partnership and come with little risk. These events are typically informal and provide a perfect forum for people to get to know each other, share ideas, and discuss the challenges they’re facing.

Stay in Touch and Add Value

It’s easy to make that first contact, but the real work lies in maintaining the relationship. Determine a cadence that is sensible, and set up calendar appointments or reminders to keep yourself engaged. When reaching out, try to bring something of value, such as a relevant lead, an article of note, or other market insight. If referrals have already occurred, provide feedback on whether it went well or not. Invite referral partners to your annual holiday party or networking events.

Think Like a Strategic Adviser

While your technical expertise is essential to your clients, it’s rarely the key differentiator in today’s competitive landscape. What will set you apart is your ability to build strong relationships, to understand your clients’ broader needs, and to deliver value beyond tax returns or financial statements. By building a reliable network of referral partners, you position yourself and your firm as a holistic business and financial resource.

You don’t need hundreds of contacts. Just a handful of trusted professionals who share your standards and values.

Ryan G. Lafferty, CPA (inactive), is a founding partner of Attolon Partners, an executive search firm specializing in accounting and finance placements headquartered in Philadelphia, and a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at rlafferty@attolon.com.