Failing to take advantage of new revenue-making opportunities could be causing financial advisers to miss out on up to 100,000 worth of potential revenue each year, according to a poll by FBA.com.
The research revealed a lack of knowledge about how referrals could be leveraged to generate more income, with one in three advisers claiming while they have considered increasing income from referrals in the past, they have either done nothing about it or have tried and been unsuccessful.
Meanwhile, 15 per cent said they had never considered increasing their income from referrals.
Ash Patel, managing director of FBA, said: “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.
Mr Patel commented: “The financial advice industry is currently wedded to a culture of reciprocity when it comes to managing case referrals â€“ you scratch my back and I’ll scratch yours! â€“ while this has been effective in the past, it is now holding IFAs back.”
Increasing profits was perhaps unsurprisingly high on the agenda for advisers, with 40 per cent saying the would consider increasing fees, 33 per cent ready to join a network to reduce overheads and 31 per cent looking at adding extra services to their offering.
Mr Patel warned that upping their fees could have damaging consequences for existing client relationships.
Last month a survey by website Money.co.uk revealed on average, those planning to make a withdrawal from their pension potsÂ would be willing to pay just 253 for advice.
The survey of 669 over-55 year olds with a pension and found that just one fifth would be willing to pay for it, dropping to just 13 per cent of men.
Almost 60 per cent said that they do not feel they need it, while almost 30 per cent believe advice is a waste of money, with a similar amount saying they cannot afford it, with 15 per cent claim they just want to access their money quickly and do not want the ‘hassle’ of taking advice.