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7 facts about conversion rates all financial advisers and planners need to know

Building a financial advice/planning business means creating new enquiries which convert into fee-paying clients.

That’s hardly rocket science but, for some reason, many (perhaps even most) advisers/planners focus too much on creating new enquiries, and too little on converting them.

So, in this week’s blog, you’ll learn seven important facts about conversion rates and have the opportunity to sign up for our next free webinar when we’ll take a deeper dive into the topic.

1. A 25% conversion rate should be the minimum benchmark

Your firm should convert at least 1 in 4 of all new enquiries, ideally more.

I know some people reading that will scoff and tell me that their conversion rate is significantly higher. And it may well be.

However, I’ve never seen a firm which religiously records all new enquiries (and we mean everything, no exceptions, no matter how bad the enquiry is), have a conversion rate above 50%.

Conversely, we’ve seen some firms convert at very low levels, close to 5%.

2. There are two significant benefits to improving your conversion rate

Firms with higher conversion rates:

  • Spend less money on marketing because they need fewer new enquiries to achieve their business goals
  • Are operationally more efficient because they need to see fewer prospects to engage a new client.

If the thought of working and spending less isn’t enough to get you focused on conversion rates, I don’t know what is!

3. Low conversion rates are symptomatic of four things

There are potentially four reasons why a firm, or an individual adviser/planner, might have a low conversion rate:

  • Marketing is creating enquiries from the wrong type of people
  • There’s some other problem with the pricing or proposition
  • The adviser/planner can’t sell the pricing or proposition
  • The onboarding process is ineffective.

4. Referrals and recommendations from existing clients will always have a higher conversion rate

Referrals and recommendations from existing clients will always convert at a higher rate than leads from other sources.

So, it’s incredibly frustrating when firms dive into other marketing tactics, including buying leads (which usually convert at a rate of below 10%) instead of building a robust referral and recommendation strategy.

5. Your conversion rate will increase if you focus on nurturing prospects

Most firms don’t do enough to nurture new prospects who don’t immediately engage.

Let’s say you’re converting 25% of prospects. Inevitably, there will be people in the 75% who you can help and would make great clients. But if they don’t immediately convert you have two options:

  • Forget about them and move on to the next prospect
  • Nurture them by adding value, and positioning yourself as a go-back-to expert, until the time is right for them to engage.

I’ll let you guess which is the right option!

6. To calculate your conversion rate, you need to get serious about data collection

To calculate the five key conversion rates you need to know about your business (more of these in a moment) and to make other evidence-led decisions about your marketing, there are 12 data points you should collect for every new enquiry.

And we do mean every new enquiry. No exceptions.

The first five are quite straightforward:

  • First name and “known by” name (so you can personalise email communications and maximise open rates)
  • Last name
  • Email address
  • Telephone number
  • Date enquiry received.

The next few are rarely collected in sufficient detail but are where the data becomes really useful.

  • Do you want to work with the prospect?

It can take many months to convert a prospect into a client and, consequently, a relatively long time to understand your conversion rate. That’s dangerous. It could mean you’re spending money on tactics that aren’t working and not doubling down on those which do.

The solution? The sixth of the data fields we recommend you collect.

The answer should be recorded early in the engagement process, perhaps even after the first phone call. And it’s an initial indication of whether your marketing is generating enquiries from the right type of people.

  • Was a first meeting agreed?

The answer to this question helps to confirm that your marketing is creating the right opportunities and whether your engagement process is working effectively.

  • Did the prospect become a client?

The fact we need to record this won’t surprise anyone!

It allows you to understand:

  • Your overall conversion rate (all new enquiries to engaged clients)
  • Your conversion rate from first meeting to engaging a new client.
  • The reason the prospect didn’t become a client

This helps you to understand the reasons why prospects didn’t become a client, identify trends, and put solutions in place.

  • The source of the enquiry

This is often missed or poorly recorded. Yet it’s vital if you’re going to understand which elements of your marketing strategy work, and which don’t.

We recommend using predefined fields to ensure data is consistently recorded, and training your team to ask the right questions so the correct source is identified.

Remember that “source” is where the prospect first heard about you.

It isn’t “email” or “phone call”. That’s the method of communication.

  • The name of the existing client or professional connection who made the recommendation

Recording which clients and professional connections recommended you to others means you can:

  • Understand the key centres of influence
  • Appropriately thank the person who made the recommendation.
  • Revenue generated

Why would you spend money marketing your business if you’re not going to measure your return on investment (ROI)?

The return you get is a function of initial fees, plus the capitalisation of ongoing fees over a sensible period. Recording both allows you to calculate return on investment. Assets under management are also an important metric for some firms.

If that’s the case for you, add it to the data you record.

7. There are actually 5 conversion rates you should monitor

Here are the five conversion rates financial advisers/planners need to understand:

#1: The headline conversion rate 

This shows the number of new enquiries you need to take on a new client.


Total number of new clients taken on / Total number of new enquiries

#2: Right fit rate 

This shows the number of enquiries that are from “right fit” prospects and helps you to understand if your marketing is working.


Total number of “right fit” enquiries / Total number of new enquiries

#3: First meeting conversion rate 

This helps you to understand if your processes to book first meetings with new prospects are working (a surprising number of firms aren’t good at this).


Total number of first meetings / Total number of new enquiries

Total number of first meetings / Total number of “right fit” enquiries

#4: First meeting to client conversion rate 

This helps you to understand if your pricing, proposition, processes, and sales techniques are working.


Total number of new clients / Total number of first meetings

#5: Recommendation Rate 

This helps you understand if you’re maximising the recommendation opportunity.


Total number of recommendations received in a year / Total number of clients

Monitoring and improving your conversion rate will boost your business

Here’s how two firms I’ve spoken with recently approach the conversion rate issues.

Firm 1:

  • Record all new enquiries
  • Add all new enquiries to their newsletter database
  • Send a monthly newsletter.

One of their financial planners said to me: “I’ve had two clients come back to me in the past few days who first enquired four years ago. They’re both now ready to go ahead.”

Firm 2:

  • Don’t record all new enquiries because they can’t get their advisers to do it
  • Don’t have a database of all new enquiries
  • Don’t send a newsletter, in fact, their blog was last updated in 2020

Be like firm 1 because they will:

  • Have a higher conversion rate
  • Spend less money on marketing
  • Work more efficiently
  • Enjoy higher profit margins.

A free webinar to help improve your conversion rates

If you’d like to improve your conversion rates, join our next free webinar at 10 am on Wednesday 22 November.

If you attend, you’ll learn more about what we’ve discussed in today’s blog.

Click here to register.

In the meantime, if you have any questions or comments about this week’s blog, email or call 0115 8965 300.

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