Referral relationships aren’t just a growth strategy. They’re also about what’s best for your client.
Research carried out by Momentum Intelligence on behalf of MLC Licensee Network found that 41 percent of advice practices will be specialising in niche advice markets as a growth strategy. Gone are the days of trying to be all things to all people.
As advisers develop their skills in specific markets, they are better able to articulate their value, market their services and build a reputation as a specialist. However, clients often require additional services that their adviser can’t offer. If their adviser can’t refer them to a fellow specialist in a different field, they could risk losing the client altogether.
For this reason, it is imperative that advice practices develop a referral strategy. Momentum Intelligence’s research found that more than half (54 per cent) of advisers will be creating referral partnerships and strategic alliances to grow their business. Over 80 per cent of advisers are looking to accountants as their referral professional of choice, ahead of mortgage brokers (54.4 per cent) and lawyers (51.5 per cent).
It’s important to remember that referral relationships are not about you and your business. They are about the client. Strong referral partnerships are those that put the client at the centre of the relationship and ensure their best interests are always being met.
With such a strong emphasis on referral relationships, there is a burgeoning opportunity for licensees to facilitate these relationships and ensure advisers have the flexibility with their licensee to support innovative partnerships.
Established licensees that can bring advisers, accountants, mortgage brokers, lawyers and other professionals together will be doing more than helping practices boost their bottom line; they will ensure a client’s best interests are being met across all aspects of their financial lives.
There is also scope for licensees to develop referral programs among advice practices, particularly those that specialise in niche markets. The licensee could play a key role in helping practices develop their niche and raising their profile within the network. When an adviser meets a client that doesn’t fit their niche, they can refer them to a fellow professional that can better service that client.
This approach doesn’t just benefit the adviser, it also shows the level of professionalism of the referring adviser and their willingness to direct a client to the right solution.
Licensees that cultivate this culture, where the customer is at the heart of every referral relationship, will be a positive force in the profitability of advice practices, the perception of the industry among clients and, ultimately, the sustainability of the profession.