Advisor conversation PMG Intelligence

Client experience is the key to advisor engagement and loyalty

PMG Intelligence has been engaging financial advisors to better understand how the pandemic is impacting the business decisions they are making today. One area that has come to the forefront is the competition among firms for financial advisors – and it’s set to continue to increase.
The way to compete for their partnership and business needs to change. The battle for financial advisor partnerships has typically revolved around building a deep relationship; usually through wholesaler support. This seems to be changing as advisors refocus on what is important to their clients (e.g., client service and product performance).

To further unpack, PMG Intelligence highlights three perspectives of financial advisors today:

  1. What is the focus of their practice?
  2. What influences the decision to work with a firm?
  3. What changes are happening?

Focal areas of the practice

As we emerge from the pandemic, the focus for most financial advisors remains the same – business growth. Whether it is growing revenue through acquiring new clients or increasing share of wallet with current clients, revenue is top of mind. Figure 1 outlines the top three priorities for the advisor business by percentage for both insurance-focused advisors and wealth-focused advisors. Interestingly, the prioritization is relatively similar. Given the entrepreneurial nature of financial advisors, it should be no surprise to see client management and revenue rise to the top. However, the research notes an increased importance of time management, integrating technology changes, and maintaining existing business. With this, it is good to see some priority given to staying current with financial products and regulatory requirements.

Figure 1

The increase in priority for time management, technology, and meeting client expectations is a function of the amount and pace of change brought on by the pandemic; specifically, the acceleration of digital transformation and individuals being more engaged in their finances. Financial advisors need more time to manage their current clients and they also need to make time for prospecting. For most firms, this may reinforce strategies to help advisors with practice management tools and business building ideas. But is this what financial advisors are expecting from companies? PMG’s research suggests help with business building is important but may not be an expectation that ultimately influences their decision to work with a firm.

Considerations for selecting a company

If you were to ask a financial service executive what is key to financial advisor partnerships, most would say it’s the depth of relationship as defined by:

  1. The wholesaler or manager being considered a business partner to the advisor.
  2. The wholesaler and firm providing differentiated sales support through business building tools and marketing support.
  3. Broad access to senior leaders who are invested in the success of the financial advisor.
  4. The values of the organization align with the financial advisor.

Figure 2 shows what financial advisors consider most important in selecting a company. The first observation is a subtle difference between insurance-focused advisors and wealth-focused advisors; particularly in the areas of product pricing and wholesaler support.  Having said that, product performance and product quality are critical for all advisors, as are brand reputation, technology, and the quality of back office. For insurance-focused advisors, the concept of ‘product’ includes features, depth of suite, and pricing. For wealth-focused advisors it is primarily about investment performance. Compensation is also important for many advisors, but not necessarily a differentiator when selecting a partner.

Figure 2

Considerations in selecting a comany to work with

With this, the surprise revolves around the relative importance of the wholesaler. For insurance-focused advisors, the wholesaler is noticeably higher in importance when compared to wealth-focused advisors. This is likely a function of the complexity of insurance sales and the need for case management as wholesalers are more relied upon for training on new products and providing expertise on existing types of insurance. For wealth-focused advisors, the research reinforces the critical importance of investment performance and somewhat diminishes the perceived influence and impact of a wholesaler.

Additionally surprising is the relative unimportance of company values, access to senior leaders, and the importance of practice management and business building ideas in making a decision. Firms have traditionally priortized these areas to earn and retain business from financial advisors. All said, the current environment of digital transformation and its impact on client experience appears to make product quality and performance, technology, and back office increasingly important and a differentiator for financial advisors.

What changes are advisors making?

There are two areas to highlight on the changes advisors appear to be making to their business today. The first area revolves around advisors targeting specific markets or customer segments. Figure 3 and Figure 4 highlight these changes. While there is a noticeable reduction in the percentage of advisors who noted actively targeting specific markets, those who are targeting specific segments are more apt to be focused on business owners, self-employed professionals, and high net worth individuals/families.

For insurance-focused advisors, business owners/entrepreneurs and self-employed professionals are of particular focus. For wealth-focused advisors, the focus is on business owners, self-employed professionals, high net worth individuals/families, mid-life individuals and families, and pre-retirees.
With increased ability to leverage data science and behavioural analysis, there may be a greater propensity to focus on specific customer segments – time will tell.

Figure 3

Targeting Specific Customer Segments PMG Intelligence

Figure 4

Targeting Specific Customer Segments by Advisors PMG Intelligence

The second area of change revolves around advisors consolidating, adding and/or switching companies.  In Figure 5 we see the extent of advisors making and/or considering changes to company relationships. Most relevant is wealth-focused advisors consolidating relationships and insurance-focused advisors adding relationships.

Figure 5

Change in company relationships in COVID-19 PMG Intelligence

But the insight comes from knowing why advisors are consolidating and/or switching companies. Figure 6 shows a sample of verbatim comments from advisors. Not surprisingly, the prioritization of customer and time management are the primary drivers for consolidation. Equally important, product and investment performance, customer service and ease of doing business are the primary drivers for switching company relationships.

Figure 6

Reasons for Consolidating of Switching Companies PMG Intelligence Study

This begs the question – are we seeing enough emphasis from firms on customer service, technology, and product quality and performance in an effort to earn the business from advisors? The research suggests firms may need to revisit their advisor loyalty and engagement strategies.

Call to action

Advisors are making decisions today to improve their business opportunities. The insights from PMG’s research suggests the competition for advisors is only going to increase. While some companies will continue to focus on value adds to improve their relationship with advisors, advisors will be making decisions based on factors like customer service, technology support, and product quality and performance. This would suggest from a strategic planning perspective, firms should consider prioritizing the customer experience (i.e., customer service, ease of doing business, product breadth, product quality and performance) to ensure they remain key partners with advisors.

At PMG, we are continuing to analyze advisor behaviour in our 2022 Advisor Loyalty and Engagement study. This year is focused on unlocking the advisor journey to better understand the key drivers and barriers to partnership as well as quantifying advisor loyalty through advance promoter modeling. If you are interested in learning more, please email Michael Banham at

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