If it hasn’t happened to you, it has probably happened to someone you know.
You receive an apparently unsolicited call from a financial advisor asking you about your frozen pension, missold PPI, or other financial product or service.
As well as being unsettling, if the firm is unregulated and unscrupulous, this practice could end up costing you both time and money.
So where exactly do these financial advisors get their leads from? And how can you guard your self, and your bank balance, from it happening to you?
Lead generation
After company-owned databases, cold calling, and seeking referrals, a financial advisor may turn to lead generation sources to find new clients.
These are externally created press releases, banner adverts or entire websites specifically designed to harvest your data, in return for as much as GBP 35 – 50 per lead.
Taking place in the UK and abroad, these sources are usually created by “one-man bands” or specialised online marketing companies.
Some utilise the names and logos of legitimate brokers to give themselves gravitas. Googling regulated PPI specialist ‘Anglia Healthcare’ for example shows an unregulated website promoting: “Compare Anglia health plans, get the cheapest quote online now” – without a legitimate link or affiliation with the company.
Some sites clone information from other sources to obtain leads, before “shutting down” the website and moving it to a new URL.
These workers build multiple versions to increase their online presence – meaning if they are not closed down, they often fall into disrepair and give out of date information.
How individuals are affected
With all these sources, clients search for information on a product or service they are interested in, become attracted by incorrect or hyper inflated and sometimes even illegal information.
When it comes to adverts, many also miss the small print highlighting the word “ad.”
They either obtain a guide, or input details into a contact form, in the hope of speaking to an advisor.
Their information is then sold to the highest bidder, which is usually an unregulated firm which spends money on leads obtained in this fashion rather than the traditional methods of “above board” marketing – such as press releases, events, well-maintained news websites and blogs.
These advisors can also afford to pay more than regulated firms as they don’t shell out cash on compliance requirements, and probably don’t pay as much for staff and offices.
Unfortunately, this practice is beyond the regulatory radar, and can lead to customer dissatisfaction, loss of reputation for firms which use the data, and unescapable costs.
What to look out for
There are several ways to ensure that you do not mistakenly give your details to these kind of companies.
Firstly, you should investigate. Does the website have a clearly stated phone number? And is the news article clearly linked to a regulated financial advisory? If the answer to either of these questions is “no” you may have stumbled upon a lead generation article.
Secondly, does the article omit crucial information? Whilst most press releases will thoroughly outline the topic and ask you to submit contact details to receive more information on whether the product or service is right for you, a lead generation website will leave huge gaps of information to try and force you to find out more.
Thirdly, if the site is linked to a financial advisory, you may also want to check the firm on the master website. Is the firm regulated? Are there testimonials? These kind of factors will help you determine the trustworthiness and plausibility of the firm.
If you reamin unsure about the legitimacy of the source, then the final step may be to check any information with a regulated financial advisor you are already in contact with, or to search for regulated firms in your country/area.