Drumming up new business is never an easy task for advisers. While word of mouth and social media promotion can take a business so far, some advisers choose to turn to lead generation companies to take their business to the next level.
But for some advisers the prohibitive cost of a lead or the lead generation company’s own policy over who they will and will not work with puts barriers in the way of their use of such companies. And one adviser who eschews these companies entirely, told Health & Protection she has achieved 310% growth over the past two years just through promoting her business on social media.
Referrals through relationships
“We don’t use any lead generators,” Katy Davies, specialist protection adviser at Henry Dannell tells Health & Protection.
“We are predominately a B2B2C business and generate referrals through relationships we have with other professionals in the industry, such as private bank connections, wealth managers, tax and trust advisers and solicitors.
“I find that generating leads this way is a far more organic way of speaking to clients, as protection is positioned as a service that we provide to our introducers to assist their clients, rather than going to clients directly.”
Penny Jackson, owner of the Insurance Boutique, is another adviser who eschews lead generation firms.
“I don’t use any lead generator firms – I have in the past and the leads need to be worked hard, and my process is not to hound people. Lead generators are much better suited to call centre models.
“All my leads are word of mouth or client referrals or via referrals I have in place with other brokers.”
Barriers to use
While lead generation firms do have their place, historical barriers have prevented some advisers for making use of them.
Alan Knowles, co-managing director at Cura Financial Services, told Health & Protection he last looked at working with lead generation firm Unbiased a few years ago and did not use the service due to their requirement to be IFA qualified.
“Last time we looked at it anyway you have to be a registered individual or you’ve got to be IFA level qualified to receive their enquiries even for life insurance – which is quite bizarre because some insurers will signpost to Unbiased but then actually they can’t find the real experts in life insurance.
“They can only find fully fledged IFAs and wealth providers who we know don’t typically write as much protection.
“That was a few years I last looked into that but that was certainly the case for some time.
“We don’t work with them. We don’t have a bad relationship. We just couldn’t receive their leads if we wanted to.”
The costs of using such firms can also prove prohibitive, according to Miles Robinson, founder and director of Home Group Financial.
“This is a timely topic subject for me as I’ve just hired three other advisers. I’ve got one starting this week,” Robinson said.
“I’ve got one starting next week and I’ve got another starting in February. They’re all self-employed advisers but it just means it’s front of mind for me because I’ve done a lot of research on the ground-up on lead generation in terms of different channels of where you can get your leads from.”
In terms of pricing, Robinson has noticed a difference between rates charged for mortgage leads to that of protection.
“I’ve seen them vary in the mortgage industry. They vary from £20 a lead to a £100 lead.
“In protection they tend to be a lot more expensive. They’re more at £70, £80 a lead and it’s also quite a competitive space in the protection world.
“As a result of that the costs of generating online leads for protection is quite high.”
Mortgage advice referrals
Of course some advisers can rely on other parts of the business for leads – particularly due to the strong link between protection and the mortgages market as David Hollingworth, associate director, communications at London & Country Mortgages, tells Health & Protection.
“Given we will have thousands of mortgage customers each month we don’t have the same requirement to use lead generation firms to bring customers to us,” Hollingworth says.
“That doesn’t mean that we wouldn’t ever consider that option to help bring standalone protection leads into the business and we have considerable knowledge in the digital marketing space.
“Lead generation hinges on cost and quality so any lead generation would need to show that it’s not only at the right price but that customers are engaged and expecting to hear from an adviser. If we were to move to generate additional leads then the source would need to demonstrate that.”
Andy Walton, protection proposition director of Mortgage Advice Bureau, agreed, noting the firm is not currently in the market for generating protection-specific leads.
“Our protection lead opportunities are generated via written mortgage business, through which we also offer protection advice,” Walton says.
“We may source these opportunities through facilitating protection sales on behalf of the lenders, building societies, and banks that we collaborate with.”
Quality of leads
But regardless of where the lead comes from, the quality of the lead is a key concern for advisers as Debbie Kennedy, CEO of LifeSearch, points out.
“While many details remain commercially sensitive, we have a targeted approach and only work with high quality and verified partners,” Kennedy says.
“Quality over quantity is key and the focus should never be on the sole criteria of volume.
“It is important to have aligned interests with partners and the ideal scenario is where there is a shared risk model in place based on quality and conversion, where the partners have fostered the customer’s interest in insurance before they reach us.
“Our mix will evolve over the coming years as we focus on new and different partner models focusing on quality over volume.”
Alan Lakey, director at Highclere Financial Services, adds: “Things may have improved but my past experience – when in a network – is that they sell and resell and consumers get extremely irritated by being called.
“Our business has always been fuelled by organic growth and nothing is likely to change that.”
Risk to clients
It is an approach Emma Astley, owner of Cover My Bubble, also favours. Astley admits while she used lead generation companies as an appointed representative manager earlier in her career, she has not used one since then.
“Trust me I have seen and heard everything in regards to lead generation,” she says.
“It’s such a risk to our clients and our businesses due to the higher risk of these plans cancelling, lower conversion and a lot of work to convert, while you can pay out higher commission payments on this basis,” she adds.
Benefits of using social media
Elaborating on what works for her, Astley points to a preference for promotion via social media.
“Social media is what works for ourselves and this is better business in my view, we find lower retentions and more referrals on the back of customer journeys with ourselves,” she continues.
“Families want to see real video content explaining insurance in a simple way. They have been cold called for many years and getting wise to what some lead generation companies say in regards to get a client passed over to an insurance firm.
“I am hearing such horror stories from my clients in regards to how they have been called and the adviser saying they are calling from their insurance company or that the policy they were sold previously was not fit for purpose; all scare tactics to get them to change over to a new plan.”
Astley maintains she always raises awareness of such factual stories on her social media platforms to make followers aware of what to look out for along with what different products are available for them as adults, bumps, and children..
“My business has grown by 310% in the last two years and all based on social media referrals,” she continues. “You may wonder about our cancellation rate as a company? Well, this is under 2% because we take our time, provide options, give our clients time to think and more importantly answer all their questions too.
“Social media can work so well for business if they do it right and have the right team and processes in place to support their ethics as a business.”
Price reflecting value
Offering a lead generation firm’s perspective Unbiased provided a statement to Health & Protection in which it said it works with with mortgage brokers, independent financial advisers and protection firms in order to give consumers “access to the best choice for their specific needs, and to help the advice industry grow.”
To deliver this, it adds it requires all the businesses who use the services to be fully qualified, regulated and independent.
“This is something on which we pride ourselves, as it helps us ensure that the consumers who rely on our service are only connected with the most adept, trusted professionals,” the company continues.
And while its platform is not free, Unbiased adds that it believes the price it charges reflects the “exceptional value we deliver for our adviser customers”.
“For example, last year, we brought over £15bn of assets under management into the industry, 75% of which came from first-time advice-seekers,” it continues.
“This is testament to the progress we’re making in sourcing existing and untapped business as we continue to raise awareness of the need for advice and act as a conduit for it.
“The Unbiased Pro model may not be right for every single advisory business, but we firmly believe that, when harnessed properly, it’s the best tool to help the market grow while helping advisers to grow their business.”