Referral relationships may need re-evaluating
Macquarie Practice Consulting has recommended financial planning businesses re-examine their overall business health, including revising whether their referral partners are still appropriate for their business.
"One thing we found [in this year's Financial Planning Benchmarking Survey] was quite a few financial planners may have had past relationships with various referral partners but haven't reviewed that for a while," said Fiona Mackenzie, associate director for Macquarie Practice Consulting.
Mackenzie encouraged advisers to look at existing referral relationships and potential new ones and conduct a full review of those together, to work out how well matched they are as referral partners.
"Sometimes time has passed, the financial planner's business or the partner business may have changed and they may have drifted apart," she said.
If the relationship is no longer appropriate, financial planning businesses should not put their time and energy into the wrong place. "We would encourage the planner to look at it afresh," Mackenzie said.
Accountants have always been seen as the primary referral partner as they have a trusted relationship with their clients, as well as year-on-year contact, but some younger planning businesses also look to more alternative sources of referrals.
Mackenzie said these could include personal trainers who tend to work with reasonably well-positioned individuals who have a good income.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
