Advisers should be cautious of using lead generators to help drum up business in the post-Covid environment, commentators have warned.
A survey of advisers conducted by FTAdviser has revealed one in five have already begun investigating different ways of finding new business, with a further 44 per cent either considering or seriously considering doing likewise.
But although drumming up new business prospects has been difficult in the Covid-19 lockdown, Phil Bray, founder and director at The Yardstick Agency, said advisers who may be considering using lead generators to secure new clients should tread carefully.
Mr Bray said: “Some advisers and planners might be tempted to take a shortcut by working with lead generators, but this is a very risky approach and we’d advise caution.
“The evidence we’ve seen is that leads are expensive and conversion rates, relative to other sources, low.
“Furthermore, you have no control over the cost or the flow of new enquiries, both of which are dictated in large part by the cost of effectiveness of Google AdWords.
“Finally, the tactics used by some lead generators are dubious and could lead to reputational damage for those firms who buy their leads.”
Earlier this month lead generators came under fire for potentially misleading adverts in the protection market, with warnings some adverts employed scaremongering tactics to encourage consumers to purchase cover.
In one instance a lead generation company cited life insurance cover of £237,000, with monthly premiums of £10, was “still available, but prices may rise soon” and another stated “UK families are rushing to secure life cover from only 20p per day”.
Mr Bray said as tempting as a “short-term win” may be, advisers investing in their own strategy will produce “more sustainable results with less risk”.
He agreed lockdown had given advisers and planners the opportunity to work on their business, with many looking to update their marketing in a bid to generate new enquires.
Covid-19 restrictions have meant some marketing options were no longer available to advisers, so Mr Bray said it was only natural they look to the world of social media, online advertising, blogs and newsletters.
Mr Bray added: “Unfortunately, too many take a trial and error approach, which is costly, time-consuming and frustrating.
“Far better to take a step back and think strategically, just as they would recommend their clients do when it comes to financial planning.
“Think about your target client – until you know who they are, and understand everything you can about them, it’s impossible to market your business.
“Then, understand what makes you different and why clients should use you – only once you have done both can you start building a strategy to engage with your target clients.”
A popular source of new business for many advisers is the directory Unbiased, which is currently trialling a new homepage that places greater emphasis on matching prospective clients with one of its 27,000 advisers, mortgage brokers and accountants listed on the site.