Lead generation Cupids

Who ever said financial planners were not romantics?

While not known for bursting spontaneously into a serenade or arriving at meetings with rose-stems clenched between their teeth, advisers are increasingly using the tactics of online dating websites to attract the right clients.

Lead generation has long been a significant challenge for independent financial advisers, particularly during the recent years of global recession where – for many advisers – referrals have all but dried up. In the United States, there has been a proliferation of books penned and webinars posted offering all sorts of remedies to referral woes.

Boston-based brokerage custody provider Fidelity, for example, launched the highly popular Referral-EDGE web tool in 2011, which gives subscribers in the financial services industry access to large databases of public information, with a view to locating prospective clients.

Others have stressed the potential of social media platforms and services like LinkedIn.

However, one particular technology stands out: online matching.

Like many of the modern world’s digital innovations it all started in California. During the worst of the financial crisis in 2007, Santa Barbara-based investment guru Frank Troise hatched a plan to provide more nuanced marketing and lead generation services to advisers.

The result was the ‘My New Financial Advisor’ (MNFA) network, which – for the “price of a cup of coffee per day” – connects advisers with consumers of the ‘baby boomer’ generation planning retirement.

Backed by the cloud-based eMoney Advisor technology, MNFA provides consumers with a questionnaire, probing them about their financial situation, advice needs and demographics. The data is then collated and respondents are matched with appropriate subscribers in the planning industry, analogous to an online dating service.

Describing himself as a pioneer, Troise tells ifa that his company uses “cutting edge marketing techniques in a very traditional industry vertical.” The response has been encouraging, he says. In fact after appearing on US network news channel CNBC in April 2012, Troise’s website was inundated with inquiries, causing the site to crash.

Given the allegedly warm reception matching has received in the US, it is perhaps unsurprising that the practice is starting to make waves down under.

In early 2012, Melbourne entrepreneur Tyron Cleine launched a matching service called ‘FindAFinancialPlanner.com.au’ (FaFP). Cleine’s service follows a similar matrix as Troise’s, whereby subscribing advisers – who pass in-house accreditation criteria and are willing to part with an upfront accreditation fee of $595 and subsequent annual subscription of between $2,200 and $6000 – are matched with consumers who have entered their advice preferences into a questionnaire.

Cleine – a former planner himself – says he was not directly inspired by the American pioneers in this field but simply saw a space in the market for an innovative lead generation service.

“Seeking more clients – and the right clients – is one of the biggest problems [advisers] face,” he says, “but many don’t want to go down the path of learning the marketing and social media and SEO skills needed to generate clients online.”

The FaFP model arguably offers a more targeted approach than its American counterpart. The matching system divides consumers and advisers by specialisation – namely, into four categories: risk-only advice, wealth accumulators, retirement & pre-retirement and self-managed super funds (SMSFs).

“The aim was to match people with specialists,” says Cleine. “For example if a consumer wants help setting up an SMSF, most financial advisers will offer this service but won’t necessarily be an expert,” he adds. “So that was the brief I gave the programmers.”

While Cleine can point to a number of happy customers who offer testimonials on his website, he concedes that some planners will go away disheartened. The matching technology is such that not all listed advisers are guaranteed a match – perhaps an indication that it actually works.

Moreover, the entrepreneur explains that only 65% of applying advisers pass the in-house accreditation, also a likely sore point.

Colin Williams, a social media consultant and director of Humble Financial Services, suggests there may be a more fundamental problem with the matching model, or at least, with its unique selling point.

“By and large, matching services really just allow old-fashioned promotion,” he says. “In practice, generally a financial planner has to pay a hefty fee to get the referral opportunity and then hope for the best.”

His contention is that while online matching services employ innovative technology, the mind-set underpinning them is not so cutting-edge.

On the ground, advisers are seemingly un-phased by this more philosophical take. For Thomas Cotter and Mike Horan of CA Financial Services Group in Sydney, the relative merits of online matching comes down to bread-and-butter issues: cost and volume of leads.

“Lead generation is definitely a problem,” explains Horan. “We’re probably getting around one or two referrals a month – which is nice – but not sufficient to stop [cold] calling.”

At the same time, however, Horan and Cotter are optimistic about the potential lead-generation capabilities of free social media platforms like LinkedIn.

Using these platforms to disseminate bits of free information and engage with consumers has led to some actual business, they say.

While the CA planners were not opposed to matching in theory, they questioned whether it really offers value for money.

“The costs associated with matching and web traffic optimisation services can be ludicrous,” Horan says. “You could end up paying a thousand dollars for some potential leads that might not even go anywhere.”

Even with the specialisation criteria implicit in the FaFP service, Cotter also questions whether matching services could really provide a client that is compatible with a company’s “style of advice and personality.”

For his part, Frank Troise is convinced his service has international appeal and that he will be able to assuage concerns such as those raised by CA.

“The financial problem of the baby boomer is global,” he says. “Australia, here we come.”