Client referrals remain strong domestically despite global trends

According to Dimensional’s latest Global Investor Study, globally, while clients are expressing high levels of satisfaction with their advisers, only around 24 per cent are actively promoting their adviser, leading to a referral.

“While 82 per cent of the population are promoters, only 24 per cent of clients have actually made a referral in the last 12 months. This ‘referral gap’ is a persistent trend over the last three years of the study,” Dimensional said.

However, advisers in Australia have told a different story. Speaking with ifa, Mazi Wealth founder Deline Jacovides highlighted that referrals form a key part of her business.

“When I first started my business around 70 per cent of the clients were from social media with the other 30 per cent being previous clients who followed me and word of mouth,” she said.

“But when I look back over my new clients this year, I can see 50 per cent have been from existing client referrals/word of mouth. The other 50 per cent is a mix of social media and referrals from other professionals like accountants.”

For an urban-based planner such as Jacovides, family and friend connections are strong referral drivers.

“One of my first clients from when I launched my business in 2022 has referred their entire friendship group and so I think I have advised about five of their friends now,” she said.

“We also have many clients who refer their parents, and their siblings.”

This trend continues in regionally based practices.

Speaking with ifa’s sister brand, Money Management, Tammy Strong, founder and senior financial planner at Strong Planning in Queensland’s Ipswich highlighted that much of her business is built on referrals.

“Since opening my own business, I’ve just had referral after referral after referral,” she said.

“I haven’t really advertised. I haven’t pushed for referrals at all, and I don’t think I’m ever going to need to.”

Daniel Brown, CEO of Coastal Advice Group also told ifa in September that referrals were fuelling the growth of his regional practices, with 60 to 90 referrals a month, meaning his practice spends little to nothing on marketing and advertising.