Ditch the 'leads', focus on referrals: Phelan

A lack of ‘cultural alignment' between planners and their referral partners is leading to poor results, according to Effective Referral Management (ERM) director David Phelan.

A typical referral arrangement with an accountant (or in some cases, a lawyer) only produces four or five referrals per year for a planner, he said.

The key to obtaining better results from the relationship is to ensure each referral is a ‘qualified referral', which stems from the accountant identifying a need in the client.

A ‘qualified referral' differs from a ‘lead', said Phelan. A lead is typically a case of a client being given a planner's phone number, which is rarely dialled, he said.

Phelan also recommends that the accountant ‘sit in' on the first planner's first meeting with the client as part of the referral process.

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"At ERM [we want to give] the accountant the confidence to refer more clients for additional advice," Phelan said.

"They need to realise that their clients will appreciate being referred, and it only helps to strengthen the relationship between [the accountant and their client]," he added.

One area of accounting work that is ideal for referring to planners is insurance for self-managed superannuation fund trustees who have direct property investments, said Phelan.

"There have been situations where trustees have been found negligent in court for not ensuring adequate insurances are in place — the sort of experience [accountants] would prefer their clients not to have," he said.