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- Referrals work in odd ways. A client of mine, RS, whom I
helped with financial planning was in his fifties and progressing
up the ladder in a large financial services corporation. I developed
some financial strategies for him and coordinated his estate
planning. Shortly after I helped him, in November, 1991 he referred
to me RH, a woman who was a colleague and close friend. I helped
her with comprehensive financial planning and was very involved
in helping her allocate her investments, coordinate her estate
planning, prepared her tax returns and did detailed tax planning,
and guided her through her career and into semiretirement.
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- During that time, I only stayed in touch with RS periodically,
and did not give him much guidance. He managed his own money
and used another CPA to prepare his returns. I always asked RH
about RS and asked her to let him know I was always available
to help. RH was godmother to his 2 daughters and quite close
to his entire family. When RS was about to retire, RH let me
know and I asked her to let him again know I was available to
help. Now, RH was retiring from the number 2 position within
the organization with having accumulated a very substantial amount
of assets. Over the phone, he told me his main concerns. We set
a meeting for the next week.
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- During a one-hour meeting at his apartment, I carefully took
notes and sent him the next day a letter, with bullet-points
detailing how I could help him. I enclosed a detailed balance
sheet based on the information I compiled during the meeting.
He called me to set up a follow-up meeting that week. We agreed
on the scope of my work. Confidently, I claimed I would be able
to save him significant amounts of income taxes and future estate
taxes, as well as help him lower his expenses and increase his
income. I offered to work for on a value-basis, namely 5% of
the amount of extra money I helped him to generate, using conservative
present values and basing it on the strategies he agreed to implement.
When I asked if he would pay me $50,000 if I created $1 million,
he said “Ab - so - lute - ly !” I was thrilled and
highly motivated by the prospect of working for a large fee based
upon how creative and smart I could be. I went to work the next
day on his financial plan. It took me 45 hours to complete. I
checked my research and recommendations with many other financial
advisors and attorneys to make sure I was right. The net results
of my work produced extra money totaling $800,000. At the agreed
5% value basis, he paid me a substantial fee - $40,000. The referral
from this client to another person and then back again to this
client worked out well for all involved.
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