Stifel and Commonwealth stayed on top of their respective category rankings in the just-released J.D. Power 2024 U.S. Financial Advisor Satisfaction Study.
Among employee advisors, Stifel ranks highest in overall satisfaction for a second consecutive year while Commonwealth ranks highest for an 11th consecutive time among independent advisors.
The U.S. Financial Advisor Satisfaction Study measures satisfaction among both employee advisors (those who are employed by their broker dealer) and independent advisors (those who are affiliated with a broker-dealer but operate independently) based on six key dimensions (in alphabetical order): compensation; firm leadership and culture; operational support; products and marketing; professional development; and technology.
The study is based on responses from 4,072 employee and independent financial advisors and was fielded from January through May 2024.
Commonwealth dominates independent advisor ranking
Commonwealth Financial Network, a privately held Registered Investment Adviser with headquarters in Waltham, Mass., and San Diego, attained a score of 819 in a 1,000-point scale in this year’s J.D. Power Advisor Satisfaction rankings, well ahead of second-ranked Raymond James Financial Services (694) and third-ranked Cambridge (676). It is also an improvement from Commonwealth’s top score from last year’s rankings of 798.
Commonwealth partners with approximately 2,200 independent financial advisors overseeing more than $296 billion in assets nationwide.
In addition to its overall No. 1 ranking, Commonwealth achieved the highest score in every reported key driver of advisor satisfaction—compensation, leadership and culture, professional development, products and marketing, operational support, and technology.
“Everything we do is about serving the industry’s most productive Advisors,” said Commonwealth CEO Wayne Bloom. “When new Advisors join the Commonwealth community, we often hear it’s because of our culture, established platform, and ownership structure. Every year, we’re building on that foundation—and we are never done.”
In a July 10 press release, Bloom thanked the firm’s advisor partners, calling them the lifeblood of the business.
“They push us to be their best possible partner, and none of what we do is imaginable without their vision, partnership, and trust,” Bloom added. “Whenever we make decisions—initiatives to take, services to deepen, products to launch—we ask ourselves, ‘Will this make it easier or more efficient for our affiliated advisors to do business with us, and will it enhance the relationships they have with their investors?’ We focus relentlessly on their satisfaction, growth, and productivity. I believe that’s the key to each of our 11 No. 1 rankings.”
Beyond top three Commonwealth, Raymond James and Cambridge, Ameriprise (641) and LPL Financial (617) also bested the segment average of 611.
Stifel stays on top of Employee Advisor ranks
In J.D. Power’s employee advisor segment, Stifel’s overall score, calculated from responses submitted by Stifel financial advisors, was 767 out of 1,000—a significant 130 points higher than the employee segment average of 637—but still 10 points lower than the company’s top score from last year’s rankings.
Raymond James & Associates (750) ranks second, Edward Jones (740) third and Merrill (657) fourth. Notable is that fifth-ranked Wells Fargo Advisors has the largest year-over-year increase in overall satisfaction in the study, increasing 156 points to 563.
In addition to ranking No. 1 overall, Stifel ranked No. 1 in three individual categories: leadership and culture, products and marketing, and operational support. The firm also performed particularly well in compensation.
“I am thrilled that J.D. Power has once again named Stifel the No. 1 wealth management firm for employee advisor satisfaction,” said Ron Kruszewski, Chairman and CEO of Stifel, in a July 10 press release. “Earning this honor for the second consecutive year further demonstrates our core values of respecting our advisors and always doing what’s best for them. It also sends a clear message that Stifel is a firm with the culture, resources, and support to help high-performing, client-focused advisors take their business to new heights.”
Stifel ranks as the seventh largest full-service investment firm in terms of number of financial advisors, with more than 2,300. Headquartered in St. Louis, Stifel’s broker-dealer clients are served in the U.S. through Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners business division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Stifel Independent Advisors, LLC.
More than a third of advisors open to changing firms
A key overarching finding of the J.D. Power 2024 U.S. Financial Advisor Satisfaction Study, released today, is that 34% of employee advisors and 41% of independent advisors who are more than two years from retirement say they may not stay with their current firm in the next one to two years.
“Aggressive compensation offers, a promise of better technology or support and flexible business models can all tempt advisors to change firms.”
J.D. Power’s Craig Martin
This is particularly noteworthy given that 28% of employee advisors and 52% of independent advisors have worked for three or more firms during their career.
“Several forces are currently at play that pose challenges to the loyalties of even the most entrenched advisors,” said Craig Martin, executive managing director and head of wealth and lending intelligence at J.D. Power. “Aggressive compensation offers, a promise of better technology or support and flexible business models can all tempt advisors to change firms. However, the cultural fit and advisor confidence in leadership are what determine how susceptible they are to attempts to lure them away.”
Following are more key findings of the 2024 study:
• Drivers of changing satisfaction: Key factors that have driven the major gains among employee advisors in the past year are related to significant improvement in compensation-related metrics, perceptions of technology and quality of support. Among independent advisors, some of the key reasons leading to a year-over-year decline in satisfaction are leadership related, with significantly fewer advisors saying they “strongly agree” that their firm is headed in the right direction, down to 46% in 2024 from 54% in 2023.
• Intended attrition equals real attrition: Using a multi-year analysis, J.D. Power finds that among advisors who said in 2021 they “definitely will not” or “probably will not” be at the same firm in one to two years, approximately half were no longer at that firm in 2024. At the same time, approximately nine in 10 advisors who said they “definitely will” still be at their firm were still there in that same period.
• Culture and leadership are critical to advisor retention: Comparing ratings provided by advisors committed to staying with their firm with those open to leaving, ratings for firm leadership and culture reflect the greatest differences. Among advisors who are less tenured at their firm, professional development is the area next greatest difference.
• Satisfaction improves among employee advisors, declines among independents: Satisfaction among employee advisors rises a significant 49 points year over year to 637 (on a 1,000-point scale). In contrast, overall satisfaction among independent advisors is considerably lower (611) and reflects a significant 15-point year-over-year decline. This is particularly noteworthy given that historically satisfaction scores among independent advisors have been higher than among employee advisors.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
