Martin Bamford: Building an advice business begins at home

Martin Bamford

When I first started out as an IFA I spent a reasonable amount of time working with some clients in Liverpool. That is about 240 miles from where I live and work in deepest Surrey, or around five hours each way by car.

It was one of those client relationships that started off innocently enough. We had a corporate client in the geographically much closer London, which decided to open a distribution warehouse in Birmingham. For a while we met regularly with the warehouse operators in Birmingham and advised them on their group pension scheme options.

And then the London head office decided it needed a call centre in Liverpool to handle their customer service. Employing phone monkeys in Liverpool is apparently a lot cheaper than doing so in the City of London.

Five-hundred-mile round trips to advise youngsters on entering a group personal pension – in the full knowledge they would probably have changed jobs within a few months – was not my idea  of fun. It was, however, good practice for a newbie and a reasonable earner at the time, even if that revenue was unprofitable in the long term.

I was reminded of these road trips during a client meeting the other day. Asking where the couple had heard about me, they presented a Society of Later Life Advisers leaflet they picked up at their father’s care home. As a recent Solla member, I am enjoying referrals from its directory, so it was little surprise how they got my name. What was slightly surprising was the source of the leaflet.

It was left in the reception area of the care home by another Solla member, an IFA based in Dorset. This IFA had made the 200-mile round trip to leave his contact details at a care home less than a mile down the road from me.

This discovery prompted two things in my head. First, I needed to get some of my own leaflets printed and placed in all the local care homes. Second, why on earth are IFAs fishing for clients such a long way from home?

I can understand wanting to continue the working relationship with a once-local client that has moved away. I can understand when an existing client refers you to their friend, colleague or relative who lives in another part of the country. I can even understand when your best corporate client opens a call centre in Liverpool and wants you to be the one looking after the pensions advice for its new team. What I cannot get my head around is an adviser actively marketing for new clients anywhere but in their hometown.

Things might be different for advisers outside of the South-east. In this neck of the woods,  there are enough prospective clients to be found in any niche within a 10-mile radius of your front door. We focus our marketing activity on our village because it secures the results we need  in terms of quality and quantity of new clients.

Perhaps IFAs like spending time waiting for delayed trains or stuck in traffic. Maybe some are blind to the possibilities that exist in their neighbourhood. Or, just possibly, could some advisers have blown their reputations in their local communities, leading them to hunt further from home?

Whatever the reason for choosing to roam in search of new clients, feedback from our local ones and the professional contacts we work with suggests, all things being equal, they will always choose the local adviser over the one based out of town.

Martin Bamford is managing director of Informed Choice