It is looking fairly certain that, later this year, the UK government will ban cold calling in relation to pensions.
A noticeable rise in cold calling pension scams was noticed following George Osborne’s pension system reforms, which allowed people to withdraw sums without being penalised.
It is estimated that these scams cost senior citizens £19m in 2015 alone. As such, Philip Hammond is pushing for a blanket ban on cold calling for pensions – similar to existing rules for mortgages.
This obviously has big implications for financial marketing, especially IFAs and other intermediaries dealing in pensions. Under these rules, you will not be allowed to contact people about pensions via telephone, unless you can demonstrate a pre-existing relationship with the client.
Many IFAs currently employ one or more telesales people to gain new pension clients. With these upcoming changes, what are you going to do with these staff? Also, how are you going to generate new clients to grow your business?
Financial Marketing: What Are Your Options?
It feels like the noose is tightening around the available options available to IFAs when it coming to outbound financial marketing. The sorts of tactics this term encompasses includes:
- Direct mail
- Television ads
- Radio ads
Essentially, outbound marketing covers the kinds of marketing most IFAs would have been exposed to as children. Unfortunately, for IFAs the list is shrinking due to government legislation.
Moreover, in today’s digital-savvy world, these forms of marketing are becoming less-and-less effective.
First of all, it’s expensive. Across industries, the average cost to acquire a lead via outbound marketing is about £298, whilst the cost for inbound marketing is around £114.
Secondly, people simply do not engage as well with outbound financial marketing. Here are some stats to consider:
- 44% of direct mail is never opened. That’s a waste of time, postage and paper.
- 86% of people skip through television adverts. This is only likely to keep rising with the ascension of TV smart boxes.
Don’t get me wrong. Outbound marketing still has it’s place in particular industries, and especially for large companies with crazy marketing budgets. But for an IFA? Not so much.
Can’t I Just Rely On Referrals?
One huge source of business for most IFAs we speak to is referrals.
This could be referrals from friends and family of current clients, or perhaps referrals from partner businesses – such as an accountancy firm.
In my experience, however, referrals suffer from at least two main drawbacks.
First of all, it only seems to get you so far in your business growth. In my discussions with IFAs, the common theme I hear is that there seems to come a point where this financial marketing channel dries up. Or the opportunities seem to come fewer and further between.
This is the problem for the more established IFA. For the startup financial adviser, you have a different problem. You have little or no existing clients to refer you!
Secondly, referrals now increasingly have an online dimension to them. Nowadays, people don’t just ask their friends in face-to-face conversation if they know a good financial adviser. They ask online forums, or they put the question out on social media.
People then reply with a link to a company’s website, or Facebook page. Are they likely to post your link to their friends if your website or social channels look terrible?
Another factor to consider is what people are saying about you online. Is is possible that clients are leaving online reviews about your business? Do you know what people are saying about you, and how might all of this affect your referral strategy?
The third point is probably the most important, however.
It always surprises me that IFAs will tell their clients not to rely on just one investment type (e.g. bonds or stocks) to generate wealth, but will themselves rely on one marketing channel to generate revenue.
In any ways, financial marketing should be approached like an investment portfolio. There should be diversification and long-term planning. A reliance on one marketing channel leaves you vulnerable.
So, if outbound marketing is becoming less viable as a financial marketing option, what should you do?
Right now, inbound marketing is working really well as a means for generating new business for IFAs across the UK. Choosing the right inbound channels, in line with an effective marketing strategy, holds enormous potential for financial advisers.
One great channel you may want to consider is PensionAdvice.org. If you are looking for more pension leads, then they can refer these prospects to you for a fee. Check it out!
Phil Teale is the Sales & Marketing Manager at MarketingAdviser, an agency specialising in marketing for financial services – and especially for financial advisers. Along with our sister company, CreativeAdviser, we also provide bespoke website design, branding, graphic design and video production services to financial clients.
Contact us on 01923 232840 or email me: firstname.lastname@example.org