If you are like most people, you have a network of friends and family members that you look to for advice and direction. These “influencers” aren’t just on social media, but part of the fabric of our daily lives. It is ideal when there is a perfect match between the timing of when you need a product or service, and someone in your circle provides just the right direction at the perfect time. But what if you have a need, and none of your normal systems of support can help you? One option is a professional referral service.

What are professional referral services?

A professional referral service is a tool or application with which you may already be familiar, such as Kayak or Expedia for flights, Angi for home repairs, or OpenTable to look at local restaurants. The distinction is in the level of engagement, the screening of you as a consumer, and how the referral fees are paid.

After watching TV commercials for well over 10 years with Joan Lunden (former anchor of ABC’s Good Morning America from 1980-1997) talking about A Place for Mom, I was never clear on how the system worked. But when I needed to do my own research on retirement communities and didn’t know where to start, a Google search put A Place for Mom at the top of the list. So, I thought I would find out exactly how it all worked. 

How it works

A Place for Mom is simply a referral service for senior living communities. It is like the screening websites mentioned above, but at a much more interactive level. Here is a summary of how it works:

1. You fill out basic information about what you are looking for, and your contact information.
2. After establishing contact, an appointed person will speak with you by phone or e-mail and determine more details of your needs.
   For my situation, it was clarifying independent living vs. assisted living, level of care, physical condition. They also screened for ability to pay for services, although no proof of resources was required at this stage.
3. They e-mail you a link to a list of options that you use as your guide for narrowing down the process, finding out more information about each facility, and even using their link to schedule appointments.
   For my situation, there were also multiple phone calls to help refine the options and coaching me as to what to look for when I toured the top facilities I had chosen.

I must confess that I was surprised at how helpful they were at narrowing down options from a universe of possibilities. After using this type of referral service, I realized there were other similar services available, depending on your need. A friend of mine recently used the exact same model to find an apartment in a large city. Instead of checking out every apartment complex in town, she was able to narrow her list down to the top five, and easily get appointments for tours using the referral service. 

Here are pros and cons to this type of referral service:

Pros:

• An organized approach to addressing the service need you have, including user friendly screening tools such as cost, location, and other factors.
• The ability to do your own due diligence. 
• For higher end services, you will have someone assigned to collaborate with you, that can help you narrow down your options.
• It saves you time from gathering information from each place independently.
• You have an advocate and a bit more leverage than if you were searching by yourself. 

Cons:

• Options may be excluded from the list that are not “signed up” within the referral network of the organization.
• The details of the payment to the referral company are hard to determine and not fully disclosed. To the extent possible, you will want to get clear on how the referral system works before you sign up. The payment to the referral company can be substantial, but it is paid by the company you end up going with. 
• Always be aware that the referral company will be loyal to whoever pays their fee—not you. 
• Companies in the network do not like paying a referral fee. Be aware that you may be pressured to work outside of the system.

As a financial services firm, we often receive solicitations from companies who want to draw us into their referral network. We have never paid anyone for referrals, and we never will. We have a niche practice and prefer to keep things transparent and easy. We avoid any conflicts of interest, and a referral service has a built in-conflict: They only get paid if you go with one of “their” recommended entities. It could be that the perfect solution for your needs is outside the referral services network. So, be very aware. While this type of system is not something we as a firm participate in, my personal experience in seeking a retirement community for a family member was very positive. I would not hesitate to use a similar service again, if needed.

As always, our tagline is helping busy people make smart financial decisions. If there is any way we can help you, please reach out to us.

Kristina Bolhouse, CPA/PFS, CFP®

Vice President/Shareholder

© 2022 Kristina Bolhouse and The Arkansas Financial Group, Inc., All rights reserved.

The Arkansas Financial Group, Inc. is a Fee-Only Financial Planning Firm located in Little Rock, AR serving clients in Arkansas and throughout the country.

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