Advisers’ referral relationships need to be “based on trust” instead of being financially driven, as the consequence could be losing the initial client, according to research from CoreData.

Financial advisers often utilise their own professional relationships, rather than their firm’s, when they need to refer clients to services they cannot provide, such as mortgage broking or accounting.

The CoreData research found advisers lean most on their personal relationships (64 per cent) when making referrals, highlighting that trust and connection hold more sway than firm-level agreements.

“The key criteria for the relationship is not how much money they’re getting for the referral, if they get anything, it’s around how they’re actually going to treat them and what it actually does for the client,” CoreData Research consulting director Grahame Evans tells Professional Planner says.