The ability to retain clients is a must for IFAs during the upcoming ‘great wealth transfer’.
But the skill to attract new customers is also vital, as the industry becomes more competitive over assets under management.
International Adviser recently reported on the launch of Wealth Provision, a firm which provides referral generation services to help IFAs secure new work.
Nick Williams, co-founder of Wealth Provision, spoke to IA to discuss what strategies firms should pursue.
“It’s a very common thing to hear that advisers rely on word of mouth and word of mouth only,” he said. “We don’t put it down. We don’t overlook it. It’s a very sensible strategy. A hot recommendation from a friend is worth its weight.
“But there’s an enormous audience beyond that.
“I don’t think the financial advice world knows quite how big that audience is. There are firms out there that are outwards looking like that, and we bring that market to them.
“Word of mouth takes a heck of a long time. You can only get in front of a limited number of people, so it takes time.
“It’s not a proactive business development strategy. It’s reactive. It’s very wait and see if the phone rings.
“I’m certainly not saying that all financial advisers wait and see if the phone rings or not, but there is a tendency to fall back on that. A little bit of proactivity can generate a lot of growth.”
Recently, digital financial adviser Open Money found that only 10% of Brits have taken paid-for financial services in the last two years.
Minimise wasted capital
Williams also spoke about what his firm does and how it can be advantageous to IFAs.
“We act as a business development manager for these firms, and I see a real opportunity there. We work just as well with large as we do smaller firms.
“There’s a limit to how many places you can be at one time. To know that there’s someone out there effectively identifying, researching, reaching out, engaging with and pre qualifying prospects before they come to you, that matters.
“We don’t replace more traditional ways of doing business, financial advisers will always want to partner with solicitors, accountants and trusted professional contacts. We can find, educate and deliver new markets.
“There’s a real opportunity to properly leverage digital marketing sources. That’s not to say that it’s not very well known already, it’s just the vast majority of the market focus on paid search and that’s it.
“Whereas, we will do basically the full suite of digital channels, and we will use those funnels according to the business and we’ll manage them to minimise wasted capital.
“That’s a major driver behind why I set up in the first place. I invested a lot of money into digital lead generation with absolutely zero return.
“I think there’s so much more that can be done by our industry to pre-qualify to make sure that the quality prospects are being passed across and that’s why we call them referrals.”
Wealth Provision looks at taking a firm’s online presence and dramatically changing.
“The core service at the moment is something we’re calling personalised campaign management,” Williams said. “It’s management of a campaign or campaigns, bespoke to the firm, via multiple social channels that could be LinkedIn, Facebook, Google, etc, and it’s heavily content driven.
“That content is written and edited by our team of experienced financial sector professionals, so it really resonates with the prospects.
“We will use our content to engage with the client’s target market and educate them over the line in a non salesy way.”
The use of social media is something that firms should be doing, but is there a fear to do this?
Williams added: “I think scared can sometimes be the right word, but it’s more just not fully understanding social media, its power and how it can be used.
“I think there’s a view it’s not in-line with the field of traditional financial advice.
“Whereas actually, you can create and portray an image that perfectly aligns with what you stand for as a business and still run Facebook ads or still have a proactive presence on Linkedin.”
A big element of the referral service is not just about getting advisers more AUM.
It is also about improving the advice gap, and making sure everyday people are getting the services they need, or do not know they need.
“For me, the gap’s enormous for lots of different reasons,” Williams said. “I think we have a very dysfunctional relationship with money in general.
“I think a lot of people who are in employment now are a product of a school system that didn’t particularly educate them very well in money.
“And I think that the financial services industry, as a whole, hasn’t been great, traditionally, at educating people.
“It’s seen as a very jargonistic, murky world that is beyond the comprehension of the layperson. It’s just not true.
“Our content will bridge that gap. It’s written in a way that people can identify with, that they can go on to and they can understand.
“That’s a major driving force behind why we’re doing what we’re doing, which is to bring the clients and end-user closer to a financial adviser.”
Wealth Provision is not just looking to help advisers in the UK. The firm has global ambitions.
“We want to start with the UK and make sure that we have representation in every county,” Williams said. “And then beyond that we’re going to expand internationally as well. Because I do see the advice and knowledge gap as being a global thing. It just presents itself differently in different territories.
“The plans are substantial. We’re obviously being very sensible about how we go about it, but the ambitions are there.
“Within 12 to 18 months, we’ll be looking beyond the UK. Continental Europe and the US are what we are looking at.
“Beyond those, who knows? We do see it as ultimately being a global operation.”