A new report finds financial advisors remained highly resilient during the pandemic and that the majority were able to grow their business in 2020.
Most financial advisors didn’t perceive the pandemic to be a threat to their business and are overwhelmingly satisfied with their career choice.
These are among the key findings of the third financial advisor wellness survey, released this week by Northern Trust Asset Management’s FlexShares Exchange Traded Funds.
The survey of over 450 advisors found that the majority (62%) grew net assets under management amid the pandemic and 57% increased their number of clients served. Only 7% reported a decline in assets and 6% a decline in clients.
The shift to remote work did not impede business growth for most, as advisors indicated that the impact of COVID-19 on managed assets was relatively neutral. And, they found several positive outcomes from pandemic-related changes, such as increased time with family (51%) and an opportunity to rethink their role or business model (46%).
Advisors’ overall stress level in 2020 (48.4%) was essentially on par with 2018 (48.2%), despite unique challenges. The main source of stress for advisors was political uncertainty (48.3%), outweighing factors such as state of the markets (41%), which was the top source of stress in 2018.
Beyond the political climate, advisors remain consistently stressed from building their business (44.3%) and compliance and regulatory matters (43.5%), which also ranked highly as sources of stress in 2018. These percentages were derived from a scale with “100%” being most stressful.
Advisors highly satisfied with career choice
Despite the challenges that marked 2020—including approximately seven in 10 advisors being uprooted from their normal work environment—overall career satisfaction and work-life balance were virtually unchanged and largely positive. Advisors reported occupational satisfaction of 78% in 2020, as compared to 76% in 2018. This may be due to the fact that advisor satisfaction is primarily driven by factors that were reinforced throughout the pandemic.
When asked what they loved most about being a financial advisor, respondents overwhelmingly stated the ability to help and provide service to those who need it (58%), followed by independence and flexibility (19%) and the relationships that they form (13%). Moreover, when asked about pandemic “silver linings,” approximately a third of respondents (36%) reported that the pandemic provided a renewed sense of purpose in their work.
“It’s encouraging that even after a year of extraordinary challenges and stresses for the nation as a whole, advisors continue to feel great satisfaction in their jobs and generally prosper,” said David Partain, Head of Marketing at FlexShares. “As advisory firms consider what their future work environment will look like, they should be mindful of these ‘soft’ factors that kept advisors highly satisfied amid the pandemic, such as feeling a sense of purpose and having flexibility, which could play a role in future recruitment and retention.”
Female advisors report greater stress
As COVID-19 continues to have an outsized impact on women in the workforce, female advisors reported significantly higher levels of stress than male advisors (55.3% vs. 46.9%), and stress levels higher than the national average of 48.9%. The average stress level for women advisors increased from 53.7% in 2018, while the average stress level for male advisors declined slightly in the same two-year period from 47.1% in 2018.
This stress was driven by a unique mix of factors. For example, having to wear “multiple hats” and balancing work and family life were found to be more stressful for female advisors than for their male colleagues. Women also found keeping elderly parents or dependents safe during the pandemic to be more stressful of a responsibility. And while women advisors experienced the same stress-related symptoms as men, the degree to which female advisors suffered from these symptoms was greater across the board.
“We’ve seen that across the workforce, the pandemic has uniquely impacted women and magnified existing stressors to their work-life balance. However, we believe there are actionable ways the industry can help support female advisors and make the workplace more rewarding,” said Laura Hanichak Gregg, Director of Practice Management and Advisor Research at FlexShares. “In general, women are typically better reporters of stress, which can lead to reaching out for help to better manage it. Advisory firms should actively encourage this open discussion of stress factors and offer coping mechanisms—for all genders—such as flexible work arrangements and support on task and time management. These ‘on-the-job’ strategies can help promote significant stress reduction and a more attractive work environment.”
Coping with stress
Based on FlexShares’ research over the years, advisors report more success in managing stress by using on-the-job strategies such as time management, delegation, and enhancing client relationships, versus off-the-job strategies like meditation, exercise, and leisure activities.
While most advisors turn to exercise and attention to health as their primary tools for handling stress (25%), FlexShares found that dealing with these issues directly in a business setting leads to a substantial reduction in overall stress.
To view full results of the survey, visit https://go.flexshares.com/wellness.