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BLOG. 4 min read

Deepen Advisor Relationships to Increase Customer Value

Existing customers are among a firm’s most valuable assets. Harvard Business Review recently highlighted research showing that companies who are loyalty leaders—at the top of their industries in Net Promoter scores or satisfaction rankings for three or more years—grow revenues roughly 2.5 times as fast as their peers.

That’s because loyal customers not only buy more and stay with a firm longer, they’re also more likely to share that firm’s content and recommend its products and services to others, who also buy more and have a higher retention rate—increasing the long-term value of both customers.

In fact, a recommendation from another advisor is the most effective way to both get advisors to consider a new option for client portfolios—and for an asset management firm’s salesperson to land that first meeting with an advisor who does not work with the firm yet.advisor-relationships1

The bottom line is that deepening the relationship and loyalty of even one advisor can pay dividends for the firm in multiple ways over the lifetime of that relationship. But that starts with being able to effectively measure the quality of the firm’s relationships with advisors.

Typical Measures of Relationship Quality Don’t Work

Ask an asset manager about the depth or quality of its advisor relationships, and they will often point to one or more of the following three things:

  • Purchasing behaviorAmount and frequency of purchases alone aren’t enough—you need to know how vested the advisor is in those decisions. Is the advisor choosing her own investments—or are the choices coming from a third party, like a home office model or a research analyst on her team? Advisors who are simply following someone else’s lead won’t hesitate to continue doing so when the model or colleague starts using a competing product.
  • In-person meetingsWhile firms often put a premium on face-to-face meetings, consider this:  is the relationship with an advisor who chats with a salesperson for a few minutes after a lunch-and-learn truly deeper than the one with an advisor who never talks to a salesperson but looks for the asset manager’s weekly market review every Monday morning—and often forwards it to others?
  • Overall level of engagementWhile this is a better gauge, high engagement can be deceptive. An advisor who opens the firm’s emails and visits the website often, attends webinars and calls a salesperson may be thinking about redeeming a product—not deepening their relationship with the firm.

The bottom line is none of these factors will accurately tell you how much the advisor likes and trusts your firm—which is critical to understanding how willing they are to put their own reputation on the line to recommend your firm and its products to others.

The Advisor Relationship Spectrum

Our "Building Relationships & Advocacy Online" research report discusses how the quality of the firm’s relationship with an advisor is marked by increasing levels of two key traits:

  • Confidence that the firm and its products have performed and will continue to perform as expected.
  • Commitment to becoming a long-term partner with the firm.


As shown in this graphic, we can use these two traits to categorize the quality of the firm’s relationship with the advisor along a spectrum with three general categories. Briefly, those are:

  • IndifferentThese advisors have no emotional attachment to the firm, often because they rely on something or someone else to make the investment decisions. So they won’t hesitate to change products when that model or person does. There is more potential to nurture advisors who are Indifferent because they are new to working with the firm.
  • ConnectedSpending time researching and choosing investments for their clients makes these advisors more emotionally invested in those choices. So when concerns arise, they’ll spend some time evaluating the situation before making a change. They’ll also recommend a product they’ve been happy with if another advisor asks them to do so—but probably won’t do it unprompted.
  • AdvocateThese advisors are emotionally vested on multiple levels—in fact, the most ardent Advocates don’t just feel that the firm gets them, they feel the firm reflects them. Often, they perceive the firm as representing something bigger than just having good products—something that resonates with their own beliefs.

The firm is the first place they turn when they need a product or market insights. If concerns about a product arise, they will actively seek answers—and possibly other options—from the firm before making a change. And since they trust the firm will continue to deliver what it promises, they will enthusiastically recommend its products and services to their peers, without being asked.

Our latest research, conducted in association with Horsesmouth, shows that the number of advisors who were willing to recommend a firm that they do business with was down 5.8% from 2019 to only 34% of advisors in 2020. So there are plenty of opportunities for firms to use strong digital engagement to build the ranks of their advocates, by moving advisors along the spectrum from indifference to advocacy—and increasing the customer lifetime value from these advisors as well.

Download our Building Relationships & Advocacy Online report to learn more about can strengthen customer relationships through digital engagement.

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