A good referral system is one of the easiest and cheapest ways of building your financial planning business.
Here, we speak with Murray McKinley, Director of McKinley Plowman & Associates, a leading Western Australian financial services firm comprising Certified Practising Accountants, financial planners and finance brokers, about how 90 per cent of its new clients are generated through in-house referrals.
Q. What are the common elements of a good referral system?
A. We identify the right clients within our business, whether they be from our practices in wages and salary tax, business services, mortgage broking or financial planning. We also use good prospecting systems and tools on our client database (for example, demographic lists of clients who may require, TTR, SMSF or risk advice).
We build rapport with accountants and give feedback on work undertaken for clients. We ask clients to tell the referral source how well we have looked after them to develop relationships with the referral source.
Q. How do you go about selecting clients that will assist with referrals?
A. We have built our business through word of mouth client referrals. It is important to tell clients that you are looking for more work and ask if they have friends and family that could benefit from your services. Our strongest advocates have selected us; we foster this relationship with simple thank you’s and feedback.
Q. What is the best way of connecting with children of existing clients through intergenerational advice?
A. We start with parents adding children to their trauma policies as kids cover, and when they come off kids cover trauma at age 17, we move them to adult policies with level premiums.
Also, we set up managed fund saving scheme for children, developing the relationship further. Being accountants, we normally get the kids’ tax returns when they start work, and this develops our relationship further.
Q. Where do advisers fall down when it comes to referrals?
A common mistake is that advisers don’t have a dialog with accountants. Our culture is that of cross-referral. By doing this, our clients benefit most from our multidiscipline practice. Today 90 per cent of our new clients are generated in-house referrals; five years ago 80 per cent of our new financial planning clients came from external sources.
Q. What role does feedback to referral source play?
A. We operate a referrers’ lunch every month and invite all our accountants, mortgage brokers and financial advisers who have client contact to lunch. We treat our professionals in our practice like an external referral source.
At lunch we discuss recent referral and how clients benefited from this referral, we present case studies on ideal clients and communicate value proposition to build on our strategic alliance between accountants, financial advisers and mortgage brokers.
Q. Any last words of advice?
We spend a lot of time with network marketing groups such as Enterprise, BNI and Real Logic. We work closely with our dealer group, Count Wealth Accounts and our Count BDM. They understand accountants and have assisted with much material in generating internal referrals from our Accountants.
For more information, have a look at Zurich Financial Services’ article on growing the value of your practice the easy way.
