By working with other professional introducers, such as solicitors and accountants, IFAs can secure ...
By working with other professional introducers, such as solicitors and accountants, IFAs can secure high quality leads, writes Stephen Phillips
Many IFAs operating in the pensions sector already work with professional introducers, such as accountants and solicitors, to secure a supply of good quality leads.
This is hardly surprising since accountants are in contact with those who need to reduce their tax liability through making suitable pension provision. The pensions market is highly complex with the wide variety of plans already in existence, including small self-administered schemes and self-invested personal pensions. Add to this the impending introduction of stakeholder pensions and pooled pension investments (or lifelong ISAs, or whatever they are to be called), and it is not surprising accountants should need the support of IFAs to explain the options available to clients.Linking for success
Pension splitting
In addition, the introduction of pension splitting on divorce or earmarking, as it exists in its interim state, before full splitting is introduced within the next few years is making life difficult for solicitors. Without the support of an IFA, many find it difficult to ascertain the right information about pension fund values, in order to advise clients properly.
How does this affect those IFAs concentrating on providing advice relating to protection planning? After all, there is nothing too complicated about basic life and health insurance, is there? What involvement could accountants and solicitors possibly have in this market? I believe these assumptions would be wrong. Even the most apparently straightforward protection needs can be satisfied in a number of different ways and with widely varying terms, conditions and costs. Many providers, for example, will not offer income protection cover for housepersons.
Varying covers
The basis of the protection available from different providers is not uniform occupation definitions vary greatly. This can affect the self-employed in particular. If professional advisers are unaware of this, they may advise the provision of some form of protection without any clear idea of what it may cost, or where the best cover for the individual client can be obtained.
It is here that the IFA can offer an invaluable service to those with different skills, such as accountants. The latter can or at least should be able to identify needs, but will not be expert in offering solutions. By working with them, an IFA can not only ensure that the right product solution is offered, but also that advice is given in the first place.
This, however, is only the tip of the iceberg. Basic problems with simple solutions have been with us for a long time and many professional advisers may consider that they have sufficient experience to tell their clients what is needed and point them in a suitable direction. But there is a whole range of needs which are continually changing and where the IFA's advice and support is becoming increasingly important, if everyone in contact with the consumer is to give the right direction.
Inheritance tax planning
Inheritance tax planning is no less complex now than it was in the days of death duties. Advisers need to be aware of the exemptions and how these can be used to minimise liabilities. The use of life assurance written under trust can be every bit as relevant today as it was 25 years ago.
There are new ways of reducing the impact of inheritance tax with which some solicitors and other advisers may be less familiar, such as home income plans. These can be used not only to generate income, but also to reduce the size of an estate altogether.
Clearly, there will be occasions when this is inappropriate, but similarly, there may well be times when it is an effective tax-planning tool. If those advisers talking to clients about inheritance tax are unaware of the option, they cannot give it consideration. Here again, the role of the IFA is to keep other professionals up to speed in respect of new developments.
The long term care market is still in great confusion, despite the recent Royal Commission report. And yet there are those who need to make provision for immediate care, either for themselves or, perhaps, for aged parents. Those solicitors and accountants approached by clients with current problems need to know where they can obtain up-to-date advice regarding the availability of suitable plans to meet immediate needs. Such a service, offered by an IFA, may also lead to the identification of clients for whom advanced planning for LTC is appropriate as well.
Keeping up-to-date
It could also be suggested, however, that professional introducers also need to be kept informed about new developments in the life and protection market. For example, some traditional plans, such as life assurance policies, may now offer immediate payment on diagnosis of a terminal illness. This is something which will not impinge on the day-to-day work of most solicitors and accountants, but something they should be aware of.
After all, if a client dies after the expiry of a life policy, but had been diagnosed within its term as having a terminal illness, the solicitor needs to be aware of the possibility of a claim; otherwise they may not even consider the possibility.
Critical illness cover may be an area where many professionals have little more than a basic awareness of availability. Such protection may not only impact upon their clients, but also may be something they should consider for themselves. This is an important point, since convincing a professional introducer to purchase a plan on their own account can be a powerful tool in encouraging them to introduce other clients to an IFA.
Maintaining contact
Having, therefore, decided that it is worthwhile encouraging professional introducers to understand more about the protection market and then to allow access to suitable clients, how can you actually go about establishing and maintaining contact?
Clearly, no IFA is operating in a vacuum and they will already have some professional contacts. Marketing is about maximising the value of existing relationships and creating new ones. There are a number of techniques which can be used to achieve both ends.
Many IFAs have found seminars to be an excellent method of achieving a number of aims. First, they enable you to present a professional image within the business community by offering information of value to the audience in informal surroundings. Second, they offer the opportunity to demonstrate how specific needs exist, of which the audience may have no more than a passing awareness, and how these can be satisfied. Third, they can expand your network of contacts if each guest is invited to bring a friend.
Most commonly, regular breakfast briefings, supported by suitable notes, are of great value. They do not impinge too much on the working day and give an opportunity for some networking within the period before and after the formal event.
Seminars are not an opportunity for selling products; they are an opportunity to promote your own services in a non-threatening environment. The cost of providing breakfast meetings need not be significant; many hotels will charge just for the meal even if you have a private room, and it can cost less than £10 a head.
One IFA has found these so successful, he has had to move the location of the briefings, as well as taking on another registered individual, to help cope with the resultant business.
Newsletters
Newsletters aimed specifically at professional introducers may still be relatively rare, but will, I suspect, provide the enterprising IFA with an ideal way of differentiating their service from that of others. Unlike consumer newsletters, these can be quite technical, but must be short. Busy professionals have no
more time for reading than anyone else, as IFAs will know from their own experience.
A typical newsletter will cover no more that three or four separate topics and will be designed to give key points, rather than extensive narrative. The value of this approach is that it permits a follow-up contact, at which the details can be given and specific client needs identified; thus leading to client interviews and earning opportunities.
Using the Internet
One final thought although only embryonic in the UK, the use of websites to provide technical information for professional contacts is already starting to develop. There is an opportunity for IFAs to be at the leading edge of development, at relatively low cost. A working site can be established for as little as £1,500 and could offer a high level of technical information, which is always up-to-date.
Stephen Phillips is proprietor of Phillips Marketing
Contact: 01933 419955. E-mail: [email protected]
Website: phillipsmarketing.co.uk
