How to attract clients through recommendations

In the previous few articles I’ve written, we’ve examined various causes for concern in the financial advice industry, such as the rise in consolidation and the increasing number of clients who say they are considering switching advisers.

As this is the final article in the series, I’d like to end on a positive note and discuss how to attract new clients. The number of individuals who could benefit from financial advice is trending upwards, while the total number of working advisers is in decline, leaving a fantastic business opportunity for those who remain.

So today, I’ll be sharing fresh data from Investec Wealth & Investment (UK) about how clients find an IFA, financial planner, or wealth manager. Since there’s no better source of information on how clients find an adviser than the clients themselves, we surveyed over 500 adults in the UK who hold stock market-related investments.
 

2 in 3 clients find their adviser through family, friends, or work colleagues

When we asked our panel of clients how they found their IFA, financial planner, or wealth manager, a total of 63% told us that it was through a personal connection.

There were interesting differences between the men and women we surveyed, with almost 2 in 5 women relying on family member’s recommendations (39%), compared to 23% of men.

Traditional marketing can’t compete with personal connections

Perhaps the most surprising finding in our survey was how few clients find their adviser through advertising, marketing, or PR. Just 6% of our client panel had reached out to a firm they’d seen in the media (for example, in a news article), and only 7% had used Google or another search engine.

Women were less likely to choose either of these methods than men, with only 3% using the media (vs 8% of men) and 4% using a search engine (vs 8% of men).

These low numbers go to show that, despite the ever-increasing ways in which IFAs and wealth managers are able to market themselves to new clients, there’s no substitute for a personal referral.
 

Trust is a deciding factor

There are many reasons why a family recommendation is the most likely way for people to find themselves a financial adviser. Some people want to keep their financial affairs, and perhaps even the fact they are seeking advice, private. Others may only trust their family when it comes to such an important decision.

Others put a similar level of trust in the recommendation of their work connections and friends. Whomever the referral comes from, the key point to note is that a personal recommendation from a trusted source is a major factor in decision-making.
 

Your reputation is everything

Our data overwhelmingly shows that your existing client base is far more likely to bring in new clients than any marketing efforts you undertake. So, the key to getting those recommendations and winning new clients is to nurture the relationships you already have and to protect your reputation.

You need to spend less time on administration and management and more time connecting with your clients and developing trust. You need to keep delivering results and communicate them in a way that clients can easily understand. Working in conjunction with a DFM is a proven way to do these things effectively.
 

With the right DFM, your reputation is in safe hands

At Investec Wealth & Investment (UK), we’ll do everything we can to protect, enhance, and build your reputation. We’ve been working with advisers across the UK for over 25 years, and we’re known among them for our service and performance.

We’re one of the largest private client wealth managers in the country, and we employ an outstanding team of dedicated analysts who provide us with detailed and independent analyses of economies, markets, and companies. As such, you can trust us to make all the day-to-day decisions and to respond quickly to opportunities and market changes that are in your clients. Which leaves you free to do what you do best – giving advice.

Read the next article in this series

The information in this document is believed to be correct but cannot be guaranteed. Opinions, interpretations and conclusions represent our judgment as of this date and are subject to change. Past performance is not necessarily a guide to future performance. The value of assets such as property and shares, and the income derived from them, may fall as well as rise. When investing your capital is at risk. Copyright Investec Wealth & Investment Limited. Reproduction is prohibited without permission.