Adviser directories have fallen out of favour with advisers over the last year as Unbiased and VouchedFor pile on new services to keep IFAs interested, a new research project finds.
Last year, Money Marketing and adviser marketing firm The Yardstick Agency ran the first comprehensive study of adviser attitudes towards Unbiased and VouchedFor, the two largest directories attempting to match advisers with prospective clients. It showed that while the cost of obtaining enquiries may look small, many advisers were struggling to convert prospects into paying clients.
We have replicated this research again for 2017, finding that while many advisers are sticking by directories to find client wins and remain optimistic that new features are improving service levels, they are both less popular now than they were 12 months ago.
The state of play
Unbiased and VouchedFor remain a common way for advisers to market themselves. Our survey of 413 advisers showed more than 60 per cent use Unbiased, more than a third use VouchedFor, and a fifth use both directories.
The average spend per month is £144 for Unbiased and £274 for VouchedFor. Crunching the numbers, when advisers get an average of 2.09 and 2.83 enquiries a month from each service respectively, it means the average cost of an enquiry comes in at under £100 for both services.
But converting those into paying clients remains an issue. Forty per cent of Unbiased users said fewer than one in 10 of these enquires actually become clients. While VouchedFor fares slightly better, a quarter of advisers still say less than one in 10 enquiries turn into clients.
This is one of the reasons lying behind a drop-off in adviser sentiment over the platforms. Around half of the users of each directory said they had become less positive about it in the past six months. Around 15 per cent for both said they felt more positive.
Verve Investment Planning IFA Steve Buttercase says: “Transactional businesses might require that sort of constant flow of business. But as the industry has moved towards fees and service standards I should think the search for new clients may have reduced a bit anyway. You take on a lot of liability with a new client without really knowing how productive they are going to be…Putting more effort into existing clients generating business might be better than taking the risk of someone coming through the door with ambulance chasers.”
But breaking up is hard to do. Most advisers are sticking by their subscriptions without any changes: 67 per cent for Unbiased and 63 per cent for VouchedFor respectively.
But that still leaves around 20 per cent of users of both who say they are planning to cancel their package in the next six months.
Offering up carrots
The pessimism comes despite significant efforts on the part of both directories to upgrade their offerings over the past 12 months. Unbiased, for example, now has the option of a “concierge service”, where instead of potential clients searching through listings to select an adviser, they fill in a form and Unbiased does the matching for them. The quickest adviser to respond receives the enquiry.
Speed is also a factor in Unbiased’s new “response rating”, which scores advisers on a one to 10 scale based on how quickly they get in touch with a prospect. All advisers start on seven based on agreed service levels when they sign up to the site. But this does not seem to have gone down too well with advisers. When asked in our survey if Unbiased should remove the rating, 59 per cent said they should. Ten per cent wanted it to stay, with the remainder undecided.
Moreover, an analysis by Yardstick of Unbiased reviews on Trust Pilot showed only a very slight improvement in consumer satisfaction with Unbiased since the response rating was introduced – despite a lower proportion of consumers reporting that an adviser had not contacted them after they reached out.
Unbiased says: “The desire to assess and improve our services at Unbiased never stops…The challenge of a service like ours is to hit the sweet spot between providing great results for professionals and meeting the needs of consumers.
We are keenly aware that without consumers, there is no service. In the past two years we have made great strides in improving the customer experience, with resulting huge improvements in sentiment, direct feedback, site traffic and user numbers.
We go on and off them, but tend to use VouchedFor more. We have had a few clients before where, even when you set criteria, they tend to ignore them. When you speak to them they want something to do with mortgages, or they haven’t got enough assets. I would not say use it exclusively, but as part of your overall toolkit, because, to be fair, I have had some good clients through them who are quite savvy and not just people who happen to have a lot of money. Maybe there could be some sort of pre-screening, so we could not pay them for those leads.
“Occasionally a change made with consumers in mind may prompt concerns from professionals on the site, and we do listen to these concerns. Ultimately our quest is always to achieve a better balance, so that we can offer advisers the best all-round value – which includes a strong stream of potential clients.”
VouchedFor, meanwhile, launched guidance service Hatch, which looks to create financial plans for enquiries that cannot be placed with advisers yet, then referring clients that need more than its telephone-based coaching service to advisers for a fee.
VouchedFor says this is not intended to compete with advisers, but improve the quality of clients coming to IFAs by improving their knowledge.
Looking on the bright side
In isolation, some of the figures presented make for bleak reading. However, there is some cause for optimism for the directories and advisers. Adviser spend on both are up from the last time we ran this survey, as is the number of enquiries by over a third at each service. Conversion rates are not significantly worse than in 2016.
While there was a small increase in those saying they had become less positive about Unbiased, Vou-chedFor saw a 10 per cent drop in those feeling more negative. And while a fifth of advisers still plan to cut ties with VouchedFor, the
proportion who said they would spend less fell from 20 per cent to 6 per cent.
VouchedFor says: “It is encouraging that enquiry volume is up 38 per cent year on year and that the percentage of advisers who are converting less than 10 per cent of enquiries has almost halved since 2016. This said, and despite them being the focal point of this report, enquiries that are directly attributable to VouchedFor are just part of the holistic value proposition that we are working towards.
“We don’t get everything right but all our efforts are guided by our core, unchanged mission to help everyone find the best adviser for their needs. We will be working increasingly collaboratively with VouchedFor members to power this mission in the months ahead.”
Delta Financial Management adviser Jarrod Ellis says advisers should be encouraging current clients make sure they leave their reviews on VouchedFor to boost rankings. Combined with referrals from current clients to get the right people through the door, this could be a winning strategy.
He says: “You can be quite specific as to the type of clients you work with, and those IFA websites are quite good for some people and serve a purpose, but you can’t necessarily control that as much as you can control asking one of your own clients for referrals. Quite often they’re the best referrals I’ve seen because they are in similar circumstances to your client.
“I’ve been on courses that tell you not just how to get your clients referring, but to also explain the type of clients you want to them… It’s a two-way street though; the directories are going to be there to drive revenue.”
This was the second year we have run our directory survey and it’s been interesting to see how the views of advisers have changed over the past 12 months.
The report makes mixed reading for both Unbiased and VouchedFor. But we can all learn from constructive criticism, and the biggest thing I take from our research is that both directories can be a very effective way of generating new enquiries.
Sure, there are things that some advisers would change. But focusing on the negatives is a mistake if it detracts from the evidence that, for many advisers, the directories work. In fact, I’d go so far as to say that unless you work in an ultra-tight niche, or you’re based in the middle of nowhere, the directories should work for every adviser.
Our research shows a group of advisers are converting at least one in two enquiries into clients. That’s an excellent conversion rate and one which other advisers, who perhaps aren’t doing as well, could aspire to.
Neither directory will be as successful in isolation as they would be as part of a wider marketing strategy. That means, among other things, building an effective online presence, including a website to complement your directory profiles, then working hard to keep everything up to date, reviewing and tweaking where necessary.
Phil Bray is director at The Yardstick Agency