Referring a financial advisor

Referring a financial advisor

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I was wondering what view accountants in practice take to referring a client to a financial adviser and would an accountant be satisfied to accept commissions from the financial adviser for referring this work on?

We have had meetings recently with a financial adviser that we know well and would trust who has put to us a proposition such as above.  We have referred bits and pieces before but they would like to make this more permanent with ourselves.  I have been happy with the work they have done so far.

and am wondering if this is the norm in the industry or would accountants much prefer to refer and not be seen to be gaining anything financially as their independence could be called into question should the client not be fully satisfied with the advice given?

Replies (6)

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By jon_griffey
22nd Aug 2013 17:23

Nice little earner

We have had no problems with taking commission from IFA's.  There are rules of professional conduct that need to be observed such as disclosing to the client the amount and nature of the commission.  We always make the point that the commission comes out of the IFA's commission so it costs the client nothing.  Clients seem to accept this.

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By Ned Ludd
22nd Aug 2013 18:58

we do it but not willy nilly

i have absolutely no qualms in recommending our current IFA.

 

we dont earn a lot of commission; we have a lose arrangement really (altough there is an introducer agreement), and occassionally we'll get a bit which is a bonus. I dont check it or even keep a mental note of who weve referrred etc.

 

never had a problem with any clients but we are up front about it and on the larger clients we give them a bit of an invoice discount.

 

i expect if you wanted to you could make a fair amount from commissions this way and maybe that time will come for us if we get a bit bigger but at present im just really happy we've got someone we can refer who does a great job, can source the entire market, and who doesnt try to fleece the client or pester us to try and mail shot our full client list!

 

 

 

 

 

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By zeofiles
22nd Aug 2013 19:40

Beware who you refer to
Several years ago we set up an official introducers agreement with an IFA firm that worked really well. One of the IFAs was a personally friend hence how the link started.

In year one we earned commission of approx £60k. Problem was we never saw a penny of it. The directors of the IFA spent the cash and then the company went into liquidation.

The client base was sold by the receivers and has since been resold to another IFA.

More importantly than the money is the service (lack of) they provided to our clients who have been passed from pillar to post. Effectively they had the usual IFA treatment - quick sell and never hear from them again!

This big problem is - and the thing to be most careful of - that although we only referred our clients to this IFA (we made it clear to all clients that we cant advise in IFA areas), some clients blame us for the poor service they have received and this in turn affects our relationship.

Now we work closely with another IFA but only refer if the client asks us or if there is a real need - i.e company pension. This IFA has also been a client of ours for over 12 yrs so we know them well.

In conclusion, do your homework on the IFA, making sure they have the proper back office to support the 'selling'. Get an official introducers agreement in place (this helps with the DPB) but most of all don't get blinded by the £'s - these are your clients so don't let someone else ruin your relationship.

PS if it helps, standard introducers terms are 25% of comission earned.

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Glenn Martin
By Glenn Martin
23rd Aug 2013 00:14

I don't take commission
I have an arrangement with an excellent IFA he is both a client and my cousin son he trust and high service levels are there. I don't take commission from him but I am happy with mutual referrals which works well for both of us.

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By bernard michael
23rd Aug 2013 08:53

How does one tell a good IFA from the rest. They may be excellent for one client and rubbish for others. Unlike us accountants they have a long term effect on their clients. I avoid at all costs recommending any IFAs

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By The Innkeeper
23rd Aug 2013 09:16

In view of the endowment fiasco

our standard letter of engagement contains a 'hold harmless clause' in respect of any IFA introduction we may make

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