A large number of advisers do not expect referrals from other business professionals over the next 12 months as the majority of them do not have any formal referral partnerships, a study by independent advisory firm Business Health has revealed.
Business Health partner Tony Stephens said common referral partnerships, or centres of influence as they are also known, included accountants, lawyers, mortgage brokers or advisers with a different skill set.
He said of those surveyed, 51 per cent of advisers had no centres of influence so did not expect to receive any referrals over the next 12 months. Of those who did, 22 per cent had just one centre of influence and 12 per cent had just two centres of influence.
"I think the reason so many advisers have no or so few centres of influence could be due to the fact that before the global financial crisis (GFC) business was good, so advisers did not have to rely so heavily on referral sources," Stephens said.
"The GFC and other events have changed that, however, so a lot of advisers need to get on the front foot and be active in sourcing good quality referral partners going forward."
He said some advisers were likely to be a bit reserved in approaching referral sources because their business performance had suffered since the downturn and because a number were concerned about how they articulated the value of advice to potential referral partners.
"Good advisers know how to position themselves and articulate the value of advice but many are a bit gun-shy post the GFC and due to a number of high profile company collapses, with legislative changes to impact the industry still also pending," Stephens said.
Advisers needed a new tactic and to go beyond just explaining the products and services they could provide to explain the outcomes they could achieve for clients, he said.
