Have you heard …?

Client referrals still play a major role in the growth of a financial planning practice, with new research showing that word of mouth recommendations are a primary influence for anyone seeking a financial planner.

The Tyndall research revealed that of the 24 per cent of consumers currently employing the services of a financial planner, the majority would recommend their planner to family and friends.

Specifically, 48 per cent of this group said they would “definitely” recommend them, and a further 27 per cent said they “probably” would.

However, Tyndall head of retail Craig Hobart said the challenge for financial planners was to turn all their clients into advocates for the business.

“It is a relatively easy job for advisers to categorise clients and, with the help of regular internal surveys and questionnaires, to check to see whether their advocacy base is growing or shrinking so they can take appropriate action,” he said.

The research also showed that clients generally believe their planners are doing a good job, with 57 per cent being very satisfied and a further 26 per cent somewhat satisfied.

The majority (74 per cent) also said they could see themselves with the same planner in three years time.

“Financial planners who have a large number of their clients in this most loyal group obviously have a stable and more valuable business and have the satisfaction that what they are doing for their clients is appreciated,” Hobart said.

The research results are based on a survey of 1,200 Australian consumers by Tyndall in July 2007.