Hello Agents:

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I thought you might find this of value."? This is one part of our training series on the 15 Sources of Business that will prove most profitable for you.

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At Cal First Financial -- We currently receive a large percentage of our business from Financial Advisor referrals."? In order to make this happen for you, you have to understand what motivates Financial Advisors to do this.


I assume you are already a real estate agent that is writing mortgages."? To not do so is not smart.

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Why Should You Care? -- If you can get half a dozen Financial Advisors referring you a client or 2 per month, and you are writing both the mortgage and the real estate brokerage elements of the transaction, this will become a significant component of your success."? This is only one of the referral approaches we use at Cal First Financial.

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You need to focus on the following points:

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Client's Best Interests -- First of all it is important to understand that like you, all good Financial Advisors have their client's best interests at heart."? It is critical that you can communicate to the Financial Advisor that it is in their client's best interests to join"?your"?clear, well thought out, conservative investment program.

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What's In It For Them? -- Even when it is in their client's best interest to invest with you, if it is not also in the Financial Advisor's best interest you will not receive much in the way of referrals."? As you know RESPA will not allow you to compensate the financial advisor for the referral."?

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There are 2 separate items here:

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1."? Initially you will most likely re-finance the client's existing home to pull out equity for investment in their first rental condo."? To maintain liquidity, you will recommend they"?invest a portion of the money you generate through the Re-Fi with the Financial Advisor."? This is of significant benefit to the Financial Advisor.

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2. Secondly, the Financial Advisor has already been paid most of their fees and commission upon the client's initial investment with the Financial Advisor."?

Yes, the Financial Advisor usually receives on going portfolio maintenance fees, but these fees are nominal compared to the initial commissions paid."? With the Financial Advisor's assistance, you will recycle portions of their investment portfolio from stocks, bonds, annuities and other financial instruments into real estate investments."?

As you continue with the client's real estate investment program properties will be sold and refinanced."? Each sale and refinancing will generate hundreds of thousands of dollars."? A significant portion of this cash will be reinvested with the Financial Advisor to maintain liquidity and diversification in the client's portfolio.

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You're Not a Threat -- You have to clearly communicate that you are an asset and not a threat to the Financial Advisor or their firm."? You need to clearly point out that you recognize that your clients need to maintain relatively high levels of liquidity and maintain diverse investments to maintain proper security for their investment portfolio."? Your investment program does not replace the Financial Advisor's investment program, but simply augments it with a needed real estate component.

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Much Better than REITs -- Your Financial Advisor may say that they can simply invest in REITs if they want a real estate component in their client's portfolio."? You have to be capable of explaining clearly why direct investment in real estate under your guidance,"?can provide safer returns for your clients that significantly out perform typical"?REIT performance.

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Zip Code by Zip Code Market -- You have to have the knowledge and related research materials that illustrate that our business performs on a zip code by zip code market basis."? You have to be able to show clearly that overall market averages for a city or county rarely represent the actual market conditions in a given neighborhood."? Each neighborhood performs to its own circumstances."? As an example, currently in San Diego some neighborhoods are currently appreciating at 15% per year, while others are depreciating at 7% or more."? The overall average for the city or the county have little meaning.

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Long Term -vs- Short Term -- You need to be able to clearly demonstrate the differences between the long term and short term investment objectives."? This means you have to be fluent in your ability to calculate internal rates of return and have to be clear and versatile in your knowledge of Future Value, Present Value, and the time value of money.

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You Won't Embarrass Them -- Financial Advisors are well educated."? They like working with other well educated professionals."? You have to be able to present yourself as such."? This means you have to have a good command of the "King's English" and you have to be familiar with the jargon and terms of their world.

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