Most financial institutions understand the importance of the relationship they have with their advisors. The ability to track and manage the specifics of that relationship varies widely. On one end of the spectrum, there are detailed CRM profiles and robust activity history of every interaction between the financial institution and the advisor. On the other end, the financial institution doesn’t have a centralized repository to track the relationship and the knowledge exists in the minds of corporate employees. Emerging best practices leverage marketing-based approaches to deepen the relationship with advisors and add a 360-degree view of the relationship.
Most financial institutions track retention but don’t measure engagement and as a result, find it difficult to predict in a systematic way which advisors are potential flight risks. It is more expensive to recruit a new advisor than it is to keep an existing advisor who is productive and a good fit for the financial institution.
Tracking “Advisor Engagement Scores” is a good starting point and can be a powerful tool to drive recruitment and referrals to your financial institution. Advisors tend to weigh the opinion of advisors they know and trust over what a paid recruiter might share. Advisor Engagement goes significantly further than simple Net Promoter Score (NPS).
We recommend going beyond a simple NPS or Satisfaction score to understand what is causing the advisor’s current level of engagement and, more importantly, if there are specific actions you can take to increase the advisors’ engagement with your firm.
In assessing advisors, we have found many of their challenges or areas of dissatisfaction are related to capabilities or solutions that the financial institution already has in place, but the advisor is unaware of. A targeted communication from the financial institution to the advisor can quickly and easily improve the level of satisfaction. Explaining or demonstrating the capability surrounding the advisor’s dissatisfaction can turn a dissatisfied advisor into a satisfied one.
Financial institutions assume that because they have already communicated to the advisor about a specific capability (i.e., block trading, online account opening) multiple times, that the advisor read or listened to the communication and connected it to the problem they are having. This is a poor assumption.
The best financial institutions translate advisor feedback into proactive action plans. An action plan is created for each advisor indicating the areas the financial institution should engage them on and areas where the advisor can better leverage the platform that the financial institution offers to run his/her practice more effectively. This action plan is tracked and managed by the financial institution and the advisor is assessed regularly to determine if his/her engagement improved after the action plan was implemented. We recommend an annual survey across the financial institution and regular event-driven assessments to measure and deepen engagement.
A Word of Warning: One of the worst things that a financial institution can do as it relates to measuring advisor engagement or satisfaction is to ask thoughtful questions in a survey and not act on the feedback. Once the advisor has taken the time to complete a survey and knows the financial institution has received specific feedback, the excuse that the financial institution is unaware of issues goes away. We emphasize the importance of translating feedback into an action plan that is tracked and managed on a regular basis by management to determine if the appropriate actions are being taken to deepen advisor relationships and resolve issues that were identified. Regular interactions with the advisor will demonstrate follow-through which also helps to increase overall advisor engagement.
Effectiveness of Advisor Engagement Methods