IFA sees 75% referral growth as advisers fill bank void

An IFA has seen new enquiries and referrals grow by 75 per cent compared to 2012, largely due to referrals of former clients of banks that have pulled out of giving advice in the wake of the Retail Distribution Review.

In FTAdviser’s weekly Friday Interview, to be published later today (21 March), Don Wernham, partner at IFA Simple Solutions Financial Management, says RDR has benefitted his firm as the new regulation has created a steady stream of new business.

He says in the past 15 months the firm has seen referrals jump 75 per cent and has also doubled the amount of clients he is taking on. In 2012, he took on 20 new clients and last year this jumped to 40.

Article continues after advert

Mr Wernham said: “Since the RDR came in, we have got progressively busier and I think this is only the tip of the iceberg.

“I don’t think the majority of people understand what the RDR is and, once they go to their banks, and find they can no longer give advice, it will get even busier for us.”

Mr Wernham has first-hand experience of this. One of his clients had a structured product with Barclays and the bank told her they can no longer advise her on it and recommended that she find a financial adviser.

Mr Wernham said: “Once people start to go back to the banks to look at their two/five years investments that people had and saying ‘I’ve got this and I need advice on it’, and find out they can’t get advice, it will get even better for us.

“That’s one reason why we are busier as we are filling that void left by banks.

“We’ve had referrals from banks where people have gone in where they have products. Barclays didn’t recommend us by name - they said they couldn’t do that as I went back in after to thank them for sending her to us but they said all we did was to direct them to Unbiased.

“When somebody goes on Unbiased and looks in our area we are the first one listed. Barclays said they were told they couldn’t recommend any particular financial adviser.

“I’ve got a colleague who helps me out who is ex-Lloyds and he told me at the back end of last year that at the end of 2014, the bank manager will have to refer people to advisers.”