Advisers Increasingly Count on Accountant and Lawyer Referrals to Attract New Clients

Advisers expect referrals from accountants and lawyers will become a bigger source of new business over the next 12 months, exclusive adviser research from Prudential1 shows.

According to around two out of five advisers (37%) referrals from existing clients are by far the biggest source of attracting new clients – but referrals from lawyers and accountants are firmly established as the second-best source.

More than half (52%) of advisers believe the number of referrals they receive from other professionals will rise in the year ahead boosting new business levels. The study found 15% of advisers say accountant and lawyer referrals are their biggest source of new business – slightly up from 11% in a similar study2 last year.

Part of the reason for this expected growth in referrals may be an increasing willingness by advisers to outsource specialised and complex advice. Nearly half of advisers (47%) say they outsource to specialists while another 25% indicated a willingness to outsource in the future. Just 23% say they will never outsource to another profession.

Another reason may be the growing need for advice on protection from inheritance tax bills with around 58% of advisers saying that they’ve seen a rise in inheritance tax advice enquiries in the past year. Looking to the future, IHT planning was identified by 37% of advisers as the second most significant source of opportunities to provide advice over the next three years, just behind the 40% who said advice on taxation of retirement income.

Other sources for attracting new clients to advisers include their or their network’s website, with 11% of advisers saying this is their best source of new clients, while nearly one in 10 (nine%) say their direct marketing including social media generates the most leads. Events are still important – around eight% say they identify new advice opportunities from them – while the same number say approved adviser lists are their best new business source.

Biggest drivers for creating advice opportunities to adviser firms:

Existing client recommendations 37%
Referrals from accountants / solicitor 15%
Company or network’s online presence 11%
Direct marketing activity including my social networks 9%
Approved adviser lists (e.g. Money Advice Service, Unbiased.co.uk etc.) 8%
Client events 8%
Other 13%
Due to rounding, numbers may not add up to 100%

John Gaskell, Head of Personal Financial Planning, at the Institute of Chartered Accountants in England and Wales (ICAEW) said: “It’s encouraging to see that advisers expect professional connections to become a greater source of new clients. In an increasingly complex financial planning environment, there is undoubtedly a greater opportunity for accountants and advisers to work more closely together to deliver better outcomes for their clients. ICAEW is launching its online Personal Financial Planning Community later this month which will be open to both ICAEW members and other professionals with an interest in this increasingly complex and important part of the professional advice sector. The Community will provide a range of content in the areas of regulation, tax, pensions, investments and probate to help professionals from different disciplines keep up-to-date and find ways to work more collaboratively.”

Paul Harrison, head of Prudential’s Business Consultancy for advisers, said: “The quality of service and the added value that advisers provide continues to be one of their best sources for attracting new clients through personal recommendations.

“However, working with other professionals, particularly accountants and lawyers, is growing in importance when it comes to new client referrals and is likely to continue to expand in the future.

“Outsourcing to specialists and working in partnership with other professionals with expertise in complex areas is becoming a significant part of the advice market but does require clarity as to the roles and responsibilities of all involved.”

(Source: Knowledge TV)

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