Accepting a new referral shouldn’t be the automatic response. Consider your options, especially when you’re already stretched.

There is good news from our latest research… Australian advice clients are staying with their adviser. Business has remained ‘sticky’ with 92% of practices reporting a 97%+ client retention rate over the last 2 years.* In addition, 87% of clients say they are willing to refer their adviser to family and friends.** The last two years have proven, yet again, that the vast majority of advice clients appreciate the value and benefits of having a good adviser to help plan and manage their financial affairs.

Seemingly, having too many referrals is a nice ‘problem’ to have, right? Because you never know when the flow will stop coming and, working longer and harder will get you on top, right? (Wrong!). It’s even trickier when a referral comes from an important client or contact and you can’t afford to ruffle feathers. While it can be easy to rationalise along these lines, we can assure you that it will catch up with you – workloads will mount up, deadlines will be missed and stress will become an unwelcome visitor to your practice.

Consider your options, especially when you’re already stretched or a referral doesn’t appear to be a good fit for your practice.

If new client acquisition is a priority/business strategy for 2022

Make sure your reasons are prudent and timely. Automatically accepting every referral may not be the best for you, your business or the client. Be aware of any potential problems, appreciate the risks and plan accordingly;

  • Revisit your ‘preferred client profile’ and ensure it reflects your ‘cost to deliver’ and that each new client will be making a positive contribution to practice profitability
  • Review your client onboarding process to ensure it’s current and known to all staff
  • Set realistic expectations for both clients and staff – under promise and over deliver
  • Keep communication channels open and be on the lookout for any signs of stress (clients, staff and owners)

47% of Australian practices have a clearly defined/documented onboarding process for new clients. These practices are 34% more profitable than those who have not yet defined their process.*

Saying ‘no’ to prospects

If this is your decision, do it with respect and empathy. Perhaps with the offer of an alternative – “I’m not in a position to help you at this time, but I am happy to introduce you someone who is better placed to help you”.

If, for whatever reason, the referral doesn’t work, it mustn’t be because of you.

Can’t decide?

Maybe you’re caught twixt and tween because you’ve got a lot on at the moment – but your business does need more of the ‘right type’ of client and the prospect fits your target profile? Perhaps this situation offers the opportunity to revisit your current operation in terms of; client segmentation, reallocation of clients between advisers (perhaps moving some clients to a more junior adviser), pricing or investment in technology for example.

For your consideration.

* Since 2002, Business Health has released a series of whitepapers providing comprehensive insight into the ‘health’ of the Australian financial advice industry and its preparedness for the future. These papers have become known as the Business Health Future Ready report. Future Ready IX, sponsored by Midwinter Financial Services, has just been released.

**Business Health’s CATScan Client Survey Database, March 2022.