In last month's article, we looked at the enormous opportunity for financial advisors when it comes to getting referrals from trust and estate lawyers. Drawing upon the results of our national survey of 619 such lawyers, we found that their clients had an average of $2.7 million in investable assets, and that those lawyers with the wealthiest clients-an average of $8.1 million in investable assets-were the ones most likely to provide a referral. Importantly, our research also showed that clients listened when trust and estate lawyers did make referrals and acted on the referrals nearly three-quarters of the time. This speaks to the intimate relationship trust and estate lawyers have with their clients. Further, more than two-thirds of the lawyers were looking for good investment advisors to refer. Finally, we found that trust and estate lawyers, unlike accountants, for example, were not being approached by advisors, with three out of four saying that they had not been pitched by a single financial advisor within the previous year.

This time around, we'll make further use of that research to see how financial advisors can position themselves to get those valuable referrals-especially important at a time when the pipeline of client referrals has been significantly slowed, if not stopped altogether, by the market downturn, the recession, and their impact on the portfolios and psyches of clients. We'll build our case for getting referrals by looking at the ways those trust and estate lawyers determine to which financial advisors to refer their wealthy clients.

It should also be noted that establishing relationships with other advisors, even if referrals are not likely to be forthcoming, is an important step toward the wealth management model in which advisors can offer their affluent clients the full menu of financial products and services.

What Lawyers Look For In Advisors

Our research showed us that trust and estate lawyers have three criteria for finding financial advisors that they can refer, none necessarily surprising but all routinely overlooked and undervalued. The first is the need to establish one's credentials, for advisors to prove to lawyers that they have both the integrity and the technical expertise to deserve a referral. Second, advisors have to show that they can be collaborative-that they can partner with lawyers without trying to dominate the situation or the client relationship. Finally, to win referrals from trust and estate lawyers, financial advisors have to demonstrate that there is something in it for the lawyer: financial incentives, referrals in kind or access to business-building information.

All of this assumes, of course, that financial advisors can find trust and estate lawyers to begin with. They're not hiding. Financial advisors may get leads from their clients or fellow advisors. They could even cold-call lawyers in their territory. No one's going to turn away a good resource, or a free lunch punctuated with intelligent conversation.


Trust and estate lawyers define professionalism as a high level of both personal integrity and technical expertise. As any financial advisor knows, it's impossible to foresee every conceivable client situation and negotiate them in advance. As a result, advisors have to trust each other, and trust is the byproduct of personal integrity.

Of course, not many financial advisors are going to say that they can't be trusted or don't know their profession. The point of differentiation, therefore, is not being honest and adept, but the ability to communicate those characteristics. Our research has shown that financial advisors either do a poor job of it or take it for granted, to their detriment. An advisor should be proactive in communicating his or her professional and ethical standards. They should also have others promote them-create a halo-by making available shared clients or references from advisors or clients.

When it comes to technical expertise, trust and estate lawyers want to be sure that a financial advisor's smile and winning way are not a mask for ineptitude. Technical proficiency can be attested to by other advisors with whom the advisor in question has partnered. It's also worthwhile for the advisor to demonstrate a knowledge of the latest industry trends and what they mean for affluent clients. Exchange funds, for instance, may soon be phased out, so what are alternatives?

In any case, it should be remembered that establishing a high level of trust and demonstrating technical expertise take time. It should also be remembered that just a handful of well-grounded relationships can lead to a steady stream of affluent clients.

Recruiting Team Players

That a financial advisor's professional skills are indisputable and his or her integrity unassailable don't matter if he or she doesn't know how to be a team player. They have to be willing to enter into a fully collaborative effort to understand what's best for the client and keep in mind that the client "belongs" to the trust and estate lawyer who brought them in. Those advisors who leave the lawyer out of the loop do so at their own peril. But our research showed that almost every trust and estate lawyer (95.2%) had lost control to a financial advisor at least once over a three-year period. Sometimes, the trust and estate lawyers failed to guide the process with the client and advisor. Sometimes the financial advisor, intentionally or not, cut the lawyer out of the loop. To avoid losing control, it's up to the lawyer to create agreements that cover what is presented, how it is presented, when it is presented, and how and when, if at all, the advisor will contact the client directly. The financial advisor also needs to ensure that the lawyer is on board every step of the way.

Our research also showed that trust and estate lawyers aren't fond of having legal documents waved in their faces, particularly non-disclosure agreements. More than half (56.1%) had been asked to sign a non-disclosure agreement in the preceding year and the vast majority-80.1%-refused to do so. And of the 19.9% who did sign the agreement, only one in four ended up bringing the financial advisor aboard. In short, very few signed and fewer still followed through.

Economic Glue

There's no better reason for giving referrals than money. It's the economic glue that creates strong bonds between the trust and estate lawyer and a financial advisor. And it leads to referrals.

Such incentives can come in a number of forms. The financial advisor could refer his or her clients to the trust and estate lawyer. (Interestingly, only 54.0% of trust and estate lawyers said they expect reciprocal referrals. They recognize that one-for-one referrals are not a realistic expectation, and given the rise of the multidisciplinary wealth management practice, not as essential for business-building as they once were.) The financial advisor could also be brought in as a resource for the lawyer's multidisciplinary practice to provide needed expertise such as money management. Third, the advisor could partner with the lawyer to help one of the advisor's clients with legal work, such as setting up a private foundation.

A less direct way for financial advisors to provide value is by providing lawyers with practice management support: the information, insights and expertise that will make them more effective and profitable. There is a lot of competition out there, and anything that helps lawyers keep up is of value. Whether the lawyers work for themselves or are part of a large law firm, the odds are good that the financial advisor's firm has resources that they don't.

In our study, 86.1% of the lawyers said they were looking for best practices insights, and another 75.3% wanted state-of-the-art strategies and concepts. They were also very interested in new compensation structures (75.9%). Being a conduit for such information helps a financial advisor build a partnership and, not incidentally, better serves the affluent client, which makes every advisor involved look good.

Remember, even when looking for referrals from trust and estate lawyers, financial advisors are hardly coming hat in hand. The lawyers have as much to gain from such relationships and referrals as do financial advisors. It's in everyone's best interest to find common ground, give their clients what they want, and get referrals.

Hannah Shaw Grove is managing director and chief marketing officer of Merrill Lynch Investment Managers. Russ Alan Prince is president of the consulting firm Prince & Associates.