How financial advisers get clients without cold calling

Picture a UK financial advice firm with three advisers and a managing partner. This is a made-up firm, used to show the arithmetic, and it describes no real practice. On Monday the managing partner opens the diary and finds forty client reviews and no idea which of last year's eleven new clients came from where. Someone suggests ringing a list of local business owners. Someone else suggests an agency. Neither suggestion starts from the question that decides the quarter: which route to a first enquiry costs this firm the least partner time for a client it wants. This article ranks the usual routes on that measure and says which one the FCA's rules restrict.

Five routes, ranked by the partner time each one costs

The cheapest enquiry is the one somebody else has already vetted, and the dearest is the one the partner has to screen from nothing. The ladder below orders five routes by where the managing partner's hours go. The order is argued from how each route works, not measured from firm data, and the hours are invented to show the method.

Introductions from clients are cheap and slow to start

A client who introduces a friend has done the selling before the adviser says a word. That is why this route sits at the bottom of the ladder, and also why it cannot be switched on in a quarter: it depends on the service clients have already had. The practical work is small and dull. Ask at the annual review who else might find the conversation useful, and write the answer down. If the firm plans to reward an introduction in any way, ask the compliance function first. We did not find a rule on that point in the research for this article and make no claim about one.

Introductions from accountants and solicitors take a relationship, not a leaflet

A professional will only introduce a UK adviser they would be comfortable explaining to their own client. So the work is to become that adviser, and the partner's time goes into it up front. Choose one accountancy practice and one law firm whose clients match the advice the firm gives. Meet them, say what the firm does and does not do, and agree how an introduction will be handled. The other side of the relationship has its own pressures: see how much an accountancy practice spends on marketing for what a practice is balancing when it decides whom to recommend.

Expect this route to be slow. The first introduction can take many months to arrive, and the meetings that precede it are partner time the firm will not see back on a timesheet. That is why it is cheaper per client than a website only once the relationship is working.

A website answers the question the prospect typed

A website can be a financial promotion, so the page that invites an enquiry is the page the compliance function reads first. The FCA lists websites among the forms a financial promotion can take, alongside adverts, brochures, emails and social media posts, and its test is whether the content is an invitation or inducement made in the course of business. A page that sets out what the firm does and how a first meeting works is the useful end of the spectrum. The partner time lies in writing it and in getting it approved, then in answering the first calls it brings. If you are weighing what to publish about fees on that site, read whether a professional services firm should publish its prices.

Bought enquiries move the cost into the diary

A supplier's price per enquiry is only part of what a bought enquiry costs an advice firm. The rest can be the screening: the calls to people who wanted a comparison, or advice on something the firm does not do. A supplier sells a first contact and nothing else. Whether the person is suitable, whether the supplier is authorised and whether its landing page was approved by someone permitted to approve it are questions the firm inherits. The point for this ladder is that hours matter as much as pounds, and the invoice shows only the pounds.

Why cold calling is the route to leave alone

The FCA's handbook restricts unsolicited phone calls to prospects to a short list of cases. COBS 4.8, on cold calls and other promotions that are not in writing, lets a firm phone a prospect only in limited circumstances. One is an existing client relationship in which the client expects such calls, and others cover certain products. The same section sets conduct conditions for calls that are allowed, including when they can be made and what the caller must say at the start. A firm that wants to rely on any exception should have its compliance function confirm it in writing. Until the function has done so, the safe assumption is that none applies, which is why the ladder leaves the route unranked.

Social media posts are not a way round the same question. The FCA's finalised guidance says its financial promotion rules apply across channels, social media included. The table collects the rule behind each route so the partner knows what to ask the compliance function.

Count the quarter before you spend on any route

Record the source of every enquiry for a quarter, and divide the partner's hours by the clients signed. Use one line per enquiry: the date, who it came from, whether it was suitable, whether it signed, and the minutes the partner spent. After thirteen weeks the ladder is no longer invented, because the hours are the firm's own. That is the evidence to have in hand before an agency is asked to improve any one of the routes.

In the invented firm, suppose the quarter shows twelve hours spent on client introductions that signed four clients, and twenty-eight hours spent screening bought enquiries that signed two. That is three hours a client against fourteen. The gap, not the exact figures, is what would tell the managing partner where the next hour should go.

Our own part in this is narrow. We introduce one vetted specialist agency to a firm that has decided which route to improve, and the financial advice and wealth management page sets out what we check before we do. For the steps from enquiry to introduction, see how it works.

What moves a route up or down the ladder

The ladder is a starting order, and a firm's own position can reverse part of it. A newly authorised advice firm has few clients to introduce anyone, so the first rung is empty and the second becomes the first. A firm with no spare adviser capacity should discount every route, since an enquiry it cannot take is a cost without a client. Reorder the ladder with the quarter's numbers, and treat the order printed here as a hypothesis to test.

When not to hire an agency yet

Do not hire an agency to build a route until the firm knows which route its current clients came from. Two other conditions make it premature. The compliance function has not agreed how a website page or a social post is approved, so every piece of copy would wait on a process that does not exist. And the advisers have no capacity for new clients this year, which turns a successful route into a queue. In each case the first job is internal, and it costs a spreadsheet and a few conversations.