5 Reasons IFA’s Should Never Buy Data Lists

It’s common practice to buy data lists within the financial services industry. It’s one of those morally and ethically grey areas. Theoretically there is nothing wrong with buying data lists. Companies buy and sell data lists all the time, it’s how that data is used is the problem.

There was a time when people used phone books and business directories. This was personal and business data that you could freely access. In fact it was often delivered to your door free of charge. There was nothing stopping someone from going from A to Z through the data lists and calling everyone. This was when there wasn’t really any other way in which to obtain this data. 

Using data lists in this way wasn’t considered unethical, after all, there was no other way really to get hold of people. In a time when information was key (and still is) and was held almost exclusively by the sales rep, one of the few ways people got to learn about services, such as financial services, was by getting a call from an advisor. 

Unfortunately, high-pressure sales tactics and the desire for bigger and faster growth from these corporations meant that people soon became unwilling to accept these calls. As the internet changed the way we viewed and gave data, privacy was a central concern and so directly contactable numbers were less available.

It’s widely known that companies buy, sell and share data all the time. It’s not illegal to sell data and there are lots of companies all over the world making a killing from doing just that. It’s not just your phone number that these companies can collect either. Anything from criminal records to purchasing habits is freely available to data brokers, meaning if you get the right data, you can pretty much sell anything to anyone. 

One of the challenges with this data though is that the recency and accuracy of it is largely guesswork. Data is a lot like the plastic floating in the ocean. It’s been there for a while, loads more keeps getting added and no one knows how long it’s going to be there for.

There’s no real guarantee that the data being supplied to you through this data list is any good anymore. People are aware that companies buy and sell data, so will happily add false numbers and emails into accounts so that they don’t get bothered by sales calls. 

New Laws On Data Lists

The world has made several law changes in regards to data over the years. GDFR in Europe being a huge one. In the UAE it is illegal to cold call. There’s obviously a grey area with this as well but on paper it’s illegal.

People have the right to have their data not sold and forgotten. New laws coming in can now let you tell websites that they are not allowed to sell your data on. There’s still a long way to go for complete online anonymity but the net is closing around websites that buy and sell data, making it harder and harder for companies to get fresh accurate data on people and sell it on through data lists.

So, here are the 5 reasons why you should never buy data lists:

1. It May Have Been Obtained Illegally

In February of this year (2021), 533 million people’s data was leaked from Facebook. Yes, half a BILLION people’s phone numbers, names, locations, job titles, you name it, were leaked online and made available to anyone who wanted it. This is obviously not legally obtained and the people in this data leak did not give permission to use their information. This is of course against GDPR and various other national data privacy acts. Whilst this may be a difficult thing to track, if you did get caught using this data, you could be liable for a hefty fine and/or other punishments.

2. It’s Definitely Being Used By Everyone Else In Your Industry

There’s a lot of money to be made from selling data. Lots of firms and individuals spend hours a day mining data and compiling huge databases of people. Sometimes these will be segmented according to job title and other demographics, sometimes they will simply be a bundle of names, email addresses and numbers. 

IFA’s and financial services firms are always on the lookout for fresh data. They’re like data vampires. They’ll burn through one list in a matter of days and then be hungry for more. Sadly, this means that they often fall prey to their own greed as they will be sold a list that has been sold to everyone else in the region. If you buy data lists, you can bet your bottom dollar that every other IFA in town has it and has called the names on the list. It’s no wonder that you’re getting an angry message from the other end. 

3. The ROI When You Buy Data Lists Sucks

You paid how much for that data list? A dollar a lead is not uncommon in the list buying game. Any less than that and people will suspect that you have really poor data. So, buying a decent amount of leads is going to cost you. As an individual IFA 1000 leads will see you for a while and will cost around $1000. Out of that, do you have any idea how much money you will make from those leads and how long will it take to see the return, if at all? When you start looking at tens of thousands of leads the number really does start to become eye watering.

4. The Lead Data Is Not Very Good

Most of the time the data you get when you buy data lists is fairly generic and static. You’ll be getting a name, an email address and a number. If you’re asking for something a little bit more specific, you may get a job title, place of work and country location. This is hardly specific information about their financial goals and objectives. Imagine being called out of the blue by someone trying to sell you something you have no idea about and no reason to buy it in the first place. You’d likely tell the person on the other end to take a long walk off a short pier for interrupting your day with frivolous calls.

5. The Data Is Probably Not Current

In places like Dubai (where Adviser Leads is based) people move jobs at lightning speed. They also come in and out of the country at an equal pace. The people on that data list are quite unlikely to still be at the listed job and may not even be in the country any more. You have no idea how old the data is when you buy data lists. It’s a widely known fact that databases reduce at a rate of 25% per year, meaning that within the first year a database of 1000 people degrades to 750 active members; the next year it’s halved. You may spend $1000’s of a database that’s 4 years old and have just flushed that money away. 

If you buy data lists it’s probably because you’re in need of some quick wins and smashing the phones is a great way to help you feel more productive. You probably will get a few decent leads out of it as well. It’s not like all bought data lists are useless, however, the work that is needed to make any money from them far outweighs the results. 

The frustrating thing about this is that most advisors and firms want and demand results NOW! There really is no shortcut to getting high quality leads. In order to really make the needle move you need to be able to show people that you feel their pain and are able to provide a solution to solve it. You need to be able to demonstrate to people that you have worked with people just like them and know how to make their lives better. This simply cannot be done through cold calling when you buy data lists.

There are plenty of other activities that you could be undertaking that will provide better results. They aren’t going to be super fast and it will take a bit of time to get anywhere near a sale, but the likelihood of closing that sale is much higher. 

Ultimately, financial services doesn’t have a great reputation and cold calling people simply aggravates that. It is a bit of a vicious cycle as many people who work within finance don’t know there’s another way to do things. Continuing to buy data lists and call people from it won’t do your reputation any good.

What Can You Do Instead?

The team at Adviser Leads have created a first of its kind guide. A step by step strategy that will have you generating leads on autopilot, booking them into your calendar within 30 days. We’re giving this away completely free of charge. All you have to do is click the button below to download.

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