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FBA.com conducted research among 251 UK-based financial advisers and wealth managers to find out more about how much client case work is referred externally and how this process is being managed.

The research revealed a lack of knowledge about how referrals could be leveraged to generate more income with one in three advisers(36 per cent) claiming that while they have considered increasing income from referrals in the past, they have either done nothing about it or have tried and been unsuccessful. Some 15 per cent said they had never considered increasing their income from referrals.

Ash Patel, managing director of FBA.com, says: “Changes affecting the industry have caused significant disruption to the way in which IFAs run their businesses and build profits from their client portfolios. The lack of awareness around alternative ways of working is indicative of a knowledge gap that is preventing IFAs from increasing their revenue through new money-making techniques.”

More than half of advisers (56 per cent) refer business to an external professional adviser due to a lack of specialist know-how. Other reasons included workload pressures (15 per cent), the need to reciprocate by referring a case to a professional adviser who provides leads from time to time (11 per cent) and a need to restructure their client base (10 per cent) to offload lower-value cases.