Hi Andrew,
Building up a financial planning client base can be challenging, given the resources required as well as the different job functions which form part of a practice. The current economic environment would have most people fearing investing which directly affects your bottom line given most planners (and I assume you are as well), are directly remunerated via funds under management.
In a previous role, I worked as a practice development manager looking after approximately 60 accounting and financial planning practices across Victoria, Tasmania and regional NSW which provided insights how many started off. Most of these firms had existing accounting client bases which supplemented their financial planning revenue until this became profitable. Others who didn't, purchased existing client bases with existing trail income and others just started from scratch. Given I don't know enough about your business, here are some practical suggestions for you -
1) Walk around your local area of business or home and I am sure you will find some stand alone accounting practices (I did this the other day in fact)
2) Give them a call, and explain to these practices what you are looking to achieve. From my experience, many are not aware of strategies available to clients given their focus is on accounting and tax work. This is where case studies are so valuable
3) Ensure you clarify if they are aligned to another licensee or have their own licence - their website should tell you this and will save you wasting your time
4) Why not try asking an existing client for the name of their accountant or solicitor as this is a qualified referral lead.
It would be fair to say that most accountants are very protective of their client bases. Protective in the sense that they don't want to lose clients or be seen as deficient in the eyes of their clients by referring them to a financial planner or referring them to someone that may tarnish their reputation. I had many successful and quality relationships with accountants. I did this by educating them on client strategies and building trust over time. Unfortunately, that takes time, but the relationship works really well once accountants realise the value that is added to all.
5) Given the personal and confidential nature of financial planning, most people are likely to find someone by referral rather than yellow pages or google.
6) The easiest and cheapest way to do this is to ask your existing clients for referrals or at least make them aware you are looking for new clients. Why not give them a few business cards to take away? Of course you need to have a good relationship with them and have provided a good experience and a superior level of customer service. Once you have a few good clients, the referrals will keep coming. I have seen this many times over.
If you have a client or someone you know in a position of authority, they may be able to act as a mentor for you - e.g running seminars for a corporate or aligning yourself to an association.
7) You could develop a quick survey for your existing clients around needs, wants, service etc and at the bottom have a section which asks for referrals or talks about a free introductory meeting.
8) We are all guilty of this, if someone asks you how you are going, I would suggest not answering "busy". This gives clients and potential referrers negative impressions because they don't want to burden you with more work. Instead you could say something like......."the current economic environment is proving challenging however, we are actively looking for referrals to grow our business. This is the time when clients need advice more than ever".
9) If you are aligned to a dealergroup, you would probably have access to a business development or practice development manager or even fund manager BDMs. Be sure to access these resources for guidance and advice as to what has worked for others. In my previous role, I would regularly put firms in touch with others as a mentoring exercise either individually or facilitate an introduction at a PD day or conference after seeking their permission. If you can find successful practices within your existing network, why not ask them how they went about things.
10) The other thing I would suggest is that you may need to offer some form of incentive to the referring party. You may need to pay them a referral fee or split income to make this attractive. I would hope that this is not the main driver of the decision for someone to refer business to you. The interest of the client should be first and foremost and this may act as a qualifier for who you choose to do business with.
11) Regular client communication is key especially during these times. Be sure to keep in regular contact with your clients and review their situations regularly and thoroughly. I cannot over emphasize the importance to you of this not only from a legal perspective, but in terms of new business opportunities. Redundancy, inheritance, home upgrade / downgrade, kids investments only become apparent if you ask the right questions and have built a trusting relationship with the client. If you only ever see or talk to your clients once a year, then it's likely you will miss these opportunities. Regular communication over time, makes clients become reliant on you for your advice and they will volunteer this information by proactively contacting you in advance because they trust you and know you care about their financial situation.
Best wishes with it all and if you'd like to have a chat or catch up for a coffee sometime, feel free to contact me.
Kind regards
Americo Donato
americo.donato@biteonline.com.au
www.biteonline.com.au
Financial Planning Leads
