Personal Financial Advice
The value of personal recommendations
How can independent financial advisers improve the number and quality of recommendations, especially those via word of mouth?
“Personal word of mouth recommendations are by far the best,” says Angela Murfitt, a Chartered Financial Planner at Fairstone, which has a network of 450 independent financial advisers and highly trained staff across the UK.
“Because their friend or family member has already tried and tested it, those being referred already appear to have the attitude that the service will be good value for them. It sort of delivers ‘social proof’ and a third party endorsement that is very valuable in setting the scene for a trusted relationship.”
Key life stages
There are several milestones throughout life where financial advice can be really critical, but pre-retirement and after bereavement are two key life stages, Murfitt adds.
“I think this could be down to the fact that these areas are complex,” she says. “The chance of getting things wrong is quite high – and the ultimate impact of that decision, quite significant. Friends and family and trusted advisers in other professions seem to be the most likely people who would be asked for referrals – as it’s usually the nearest and dearest that people would trust to offer that guidance.”
How can advisers ensure they stay front of mind in this process?
“It’s about doing things differently,” Murfitt suggests. “Doing what you say you are going to do – and being appreciative. I say ‘thank you’ to my clients for the business and support they give me. I love my job and I take a genuine interest in my clients lives – and they seem to connect with that.”
Refer a friend
In the banking sector, a growing number of ‘refer-a-friend’ schemes have introduced cash incentives for customers if they refer a friend or family member who switches to their bank.
A number of financial advisers are also adopting this approach, including Skipton Financial Advisers, the financial advisory arm of Skipton Building Society.
Existing customers who recommend a friend can choose from a range of gifts including £80 in Marks & Spencer vouchers, a case of quality wine or £100 to a charity of their choice.
In a survey of almost 1,200 customers in the six months to June 2018, Skipton found that 94% of its financial advice customers were likely to recommend the society to friends or family.
Iain Tyrer, Skipton’s head of service delivery, says: “In recent times, financial advice has become less accessible – yet research shows there are millions of people who can benefit from financial advice. That’s why we actively encourage customers to share with their family and friends the help they’ve had from Skipton. And the difference we can potentially make to their financial plans.
“As there’s no-obligation to act on our advice, our customers can be confident of recommending our services knowing their friend or family member won’t be placed under pressure.
They receive a choice of gift as our thank you. As the saying goes, one good turn deserves another.”