SMSF advisers and accountants needed to make sure the correct client parameters were established for referral arrangements with other service providers in the sector to be truly effective, according to an industry consultant.
Speaking at the SMSF Association NSW Chapter breakfast in Sydney last week, Mayflower Consulting director Sarah Penn said: “When you meet someone you think might be right [for a referral arrangement], the first thing the both of you need to do is talk about what your ideal client looks like.
“You need to make sure that your [client] base has the people they want and vice versa, or if it’s one way, you need to make sure that the right sort of people are going to come across.
“Then you actually need to put systems and processes in place to make it all happen.”
Penn said when done correctly, referral arrangements could negate the need to employ any alternative marketing strategies, but if not executed well, could also be a waste of time and money.
However, she warned against entering into an arrangement where compensation was included in the process.
Regardless of what the remuneration amount for a successful business referral might be, it would always be considered a relative small amount of money and would add additional and perhaps unnecessary complexity to the arrangement, she said.
“You should be referring people because it’s the right thing to do for your client,” she said.
“I just think [paying for referrals] is a big hassle because then you’ve got disclosure [obligations] and everything around that.
“You’re better off just to keep it clean. That’s just my personal view.”
She advised an accountant or adviser needed to ensure their services could be marked at a level of nine out of 10 to enable a steady number of referrals to come their way.
“If you ask people to rate your business and they give you between a zero and a six, then they’ll be actively telling people you’re no good,” she said.
“If people give you a seven or an eight, then they’re actually kind of fence-sitters.
“You need to be getting nine out of 10. If you’re my planner, I need to love you as my planner and you need to be fantastic.”
