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Advisers actively seeking professional connections see four-fold increase in referrals – yet nearly half are still missing out

11 Nov 2020

Financial advisers in the UK who actively seek professional connections experience significant growth in the number of referrals they receive, according to new research from Octopus Investments.

There was a four-fold increase in referrals from accountants and solicitors among advisers surveyed1 who actively pursue professional connections as part of their strategy for gaining new clients.

However, while more than two thirds (70%) of advisers said that these relationships are key to growing their business, the research found that only 56% of advisers are actively developing professional connections as part of their strategy. This is despite almost nine in ten (87%) advisers recognising that offering holistic and integrated advice with accountants and solicitors creates better outcomes for clients.

While the Covid-19 pandemic has inevitably presented additional challenges for advisers looking to build new connections, the research also highlighted some fundamental misconceptions about these relationships, which are preventing some advisers making the most of their professional connections.

So, what’s holding some advisers back?

The main barrier for advisers appears to be a mistaken belief that the other parties are not interested, with three in five (62%) advisers citing a ‘lack of appetite’ from accountants and solicitors. A further 39% of advisers said they thought saturation was an issue, as accountants and solicitors are already working with enough advisers and are consequently not interested in developing new connections.

However, the research showed this to be a misconception. Only 1% of the accountants and solicitors polled2 said they had never referred a client to a financial adviser, while each professional said they have worked with an average of four to five advisers over the past two-years.

In addition, less than a third (29%) of accountants and solicitors surveyed said they already work with enough financial advisers, suggesting there is plenty of opportunity for advisers to grow their network of referral relationships.

Charlotte Fairhurst, Strategic Partnerships Manager at Octopus Investments, said:
“We’ve been running professional connection workshops with advisers for a number of years and this is a consistent theme. There is a perception that accountants and solicitors either aren’t interested, or they already have a referral relationship in place and are not looking to take on more. Yet this research clearly shows there is still a huge opportunity to create new connections, in addition to the benefits for clients.

When thinking about how to approach accountants and solicitors, it’s worth demonstrating any specialism that you have, so be specific – they want to know that you’re experienced in dealing with the issues that are common in their client bank. That way you should remain front of mind when particular planning issues crop up.”

The Covid-19 effect

The research highlights the challenge presented by Covid-19 in developing new professional connections, with 57% of advisers agreeing that it is harder to develop new relationships due to the pandemic. This is compounded by the fact that eight in ten (81%) advisers prefer to meet in person before making referrals.

Despite the challenges presented by the pandemic, opportunities remain for those who are adaptable and willing to embrace new ways of working.

Rohan Sivajoti, Co-founder of NextGen Planners, comments:
“People still haven’t accepted that this is how it is right now, and this is how it’s probably going to be for a while. It’s time to adapt, it’s time to accept, and it’s time to find a new way of building relationships.”

Dave Seager, Managing Director of SIFA Professional, adds:
If you have the confidence to talk through what you do in a Zoom environment and you’re keen to build new professional connections, it’s actually quite easy to talk to solicitors at the moment.”

Building and maintaining connections

In addition to highlighting some of the barriers to developing new connections, the research from Octopus also provides insights as to how advisers can foster and maintain successful professional connections.

1. Reciprocity is key

Almost six in ten (58%) accountants and solicitors believe that reciprocity is important when developing a referral relationship with financial advisers, while the least important factor was the potential for referral fees. For advisers then, creating clear lines of communication on the reciprocity of relationships will likely maintain healthy professional connections.

2. Protect client relationships

For private client solicitors2, the number one barrier stopping them from making referrals is that their clients have had a bad experience, with 40% citing this as an issue. It is important for advisers to recognise the level of trust solicitors are placing in them when making a referral and so try to protect their connection’s client relationships by providing a quality service. Similarly, accountants polled said that protecting themselves from complaints was the second most important factor driving them to make referrals.

3. Financial advice from referrals

The financial advice most commonly required from referrals is personal retirement planning, with eight in ten (82%) advisers saying they receive referrals leading to retirement planning, followed by estate planning (56%) and investments & saving (54%). These were also the three types of referrals that advisers said they would like to receive more of. Understanding where the opportunities lie with accountants and solicitors will allow advisers to adequately plan and research who to approach in order grow their business within their own specialisms.

4. It’s a long-term investment

It takes an average time of eight months for advisers to see their first referral following an initial introduction, meaning that advisers need to be willing to put in the time before they see the reward.

Charlotte Fairhurst, comments:
“Trusted professional connections are becoming central to advisers’ growth plans over the coming years. Our research has shown that some of the most successful advisers are those that have strong, reciprocal referral relationships. Professional advice is now more interconnected than ever before – but significant numbers of advisers are yet to unlock the growth potential this can bring.”


Notes to editors:

  1. Research conducted by Opinium between 7 and 14 October 2020. Sample: 200 financial advisers in the UK.
  2. Research conducted by Opinion Matters between 7 and 9 October 2020. Sample: 100 accountants and 100 private client solicitors.
  3. For further findings from the research, along with insights from Charlotte Fairhurst and other industry spokespeople, go to the Octopus Investments website.

For journalists in their professional capacity only. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest. Personal opinions may change and should not be seen as advice or a recommendation. We do not offer investment or tax advice. We recommend investors seek professional advice before deciding to invest. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: November 2020.