Originally published at theyardstickagency.co.uk, 29 June 2023

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Referrals from accountants and solicitors are the most exciting – and untapped – way for financial planners to grow. As a channel, professional connections are more scalable than, although important, client recommendations, and beat increasingly competitive, saturated and ever-pricier marketing channels like Google or LinkedIn.

Many clients introduced by law, accountancy and corporate finance firms are “ideal” for financial planning professionals: they have complex affairs, may be going through difficult and/or important life transitions and are used to “delegating” to professional advisers.

Some financial planners have referral tie-ups worth £1m+ a year in recurring fee income; for others, 85%+ of all new clients come from professionals. Get it right, and referrals can supercharge your firm’s trajectory.

So far, so great. But you’re dealing with busy – and sometimes, sceptical – fellow professionals.

Sourcing steady referrals from accountants and solicitors won’t happen overnight or without the right inputs. Your priority must be understanding what’s stopping your local accountancy firm or lawyer from referring clients to you in the first place.

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1. You haven’t earned their trust yet

Your average lawyer or accountant hears “IFA” and may think “shiny-suited man selling financial products” (historically, it usually was a man). Indeed, we have heard this expression and others like it several times over the last couple of years.

Like it or not, many will have been “burned” by an IFA in the past – perhaps their clients were referred away to benefit the IFA commercially, or they received poor advice; most don’t appreciate there is a difference between a financial planner and an IFA.

How to fix it

• Don’t expect the “best” clients from the outset. Instead, build trust by showing willingness to invest in the relationship.
• Sit down with a senior person and take them through the financial planning journey, or key elements of it, so they get to experience it and understand the benefit. (RQ Compass can quickly help professionals and their clients get a feel for financial planning and how it could benefit them).
• Compile due diligence, evidencing your firm’s capability and track record. (RQ Certified, through its comprehensive, third-party validation, provides a modern, independent, credible and engaging means of doing this).
• Identify firms with a niche and align your proposition accordingly. If the firm you’re targeting specialises in advising women going through divorce, as a partner, are you as attractive and safe-feeling as you could be? Do you have the relevant Resolution accreditation, for example?

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2. They don’t have the data

Many accountants and lawyers look after hundreds of clients and feel rushed off their feet. They’re uncomfortable talking to clients about their personal finances, often don’t know their clients’ wider affairs as well as planners do and don’t know which of them definitely do, or may, need planning advice.

You can forget about them referring work to you and your colleagues if they don’t know who needs referring.

How to fix it

• In a word: technology. Running webinars and training to help other professionals spot clients requiring financial planning and advice can work, but they produce a lumpy referral pipeline and take time and effort.
• Instead, plug into a diagnostic app that mines the firm’s data for suitable referrals. (RQ Compass is a client data collection tool for accountants and solicitors that enables them to uncover opportunities to support clients with wider, more personalised advice, and is available for you to offer free of charge to your professional connections).

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3. They fear breaking the rules

Let’s say you’ve found that rare lawyer or accountant who knows exactly which of their clients need the help of a financial planner. Even then there’s a problem: many professionals are wary of straying into regulated advice or other areas they shouldn’t when referring clients.

Misconceptions persist. Classics include: “I’m not allowed to recommend one firm, I have to give three business cards” and “I have to be careful sharing client data because of GDPR”.

How to fix it

• Effortlessly follow the guidance of their professional body. Built together with the ICAEW, RQ’s referral wizard delivers both ease and comfort; the technology simultaneously prevents professionals unwittingly breaking the rules, gives them the confidence to go ahead with referrals (rather than holding back, as often currently happens, to both client and firm detriment) and evidences that they have acted compliantly at every step.

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4. The collaborative experience and data sharing underwhelms

Referring to another professional can sometimes feel like pushing clients into a black hole. The introducing professional can be left feeling out of the loop: “Have you met my client yet?”, “What advice/service are you offering?”, “Is there something I should be aware of?”.

Impenetrable email chains and sporadically updated shared files (if the referrer is lucky) do not make for a happy, productive or watertight collaboration.

How to fix it

• Communicate well. Be systematic. Predictable. Understandable. Prioritise little and often; make it easy to deliver and digest.
• Alongside periodic updates, consider making key meeting notes available and invite them to joint meetings where appropriate and valuable. Make it be and feel like a team effort.
• Use systems and tools that make it easy for everyone. (RQ’s platform offers a real-time view explicitly designed for seamless collaboration between financial planners and other professionals).

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5. What’s in it for me?

The ultimate question. You (and they) need a credible answer for the referrals to flow. Remember: nine times out of ten you aren’t the only financial planner they can collaborate with.

How to fix it

• Understand each firm’s world: what makes them tick, how they position themselves in the market and who their clients are. Some want nothing more than a safe pair of hands for their clients; others are motivated by revenue sharing and/or reciprocal referrals; some offer a premium service and will use their superior professional connections to command higher fees for their core offering.
• Ready your defensive plays. If they don’t offer – or even consider – personal financial planning, maybe they’ll lose out to an accountancy firm with an in-house offering? Are they aware of the money they’re potentially leaving on the table if they don’t consider fee sharing?
• Be strategic. Focus on family law firms or those with private client partners. Target accountants who also market themselves as “business advisers”.
• Flag your present value. You can and frequently will identify other ways they can help their client. You add the breadth, depth and colour that helps them improve their service to clients and makes them more competitive.
• Flag your lasting value. Lawyers often lose the connection once a transaction is done, while accountants often lose a client if they sell their business or retire. Financial planners develop meaningful, valuable ongoing client relationships; they are often just getting going and potentially have decades of enjoyable relationships ahead of them in these scenarios.

Focus on these five fixes and enjoy both helping more people who would genuinely benefit from your service, and the boost to your bottom line.