Advisors are old and it’s a problem. So much so that J.D. Power claims it’s a full-blown “generational crisis.”
The average age of financial advisors is about 55, and approximately one-fifth of advisors are 65 or older. As these advisors move into retirement, tomorrow’s leading firms will be those that effectively attract, develop and retain new advisor talent.
Advisors under the age of 40 account for only 11% of the financial advisor population, it adds, and the support they want to help them develop a successful practice looks very different from that of the previous generation.
According to the firm’s “2019 U.S. Financial Advisor Satisfaction Study,” released Tuesday, this first generation of financial advisor “digital natives” expects technology to play a more important role in that support, and they are much less satisfied than older advisors with the technology support they currently get from their brokerage firm.
“The 9-to-5, office-based culture, with its coffee for closers and gong-ringing ceremonies to celebrate new sales is gone,” Mike Foy, Senior Director of the Wealth and Lending Intelligence at J.D. Power, said in a statement. “In its place, the new generation of mobile financial advisors is interacting with clients and prospects via a range of digital channels including social media, text, chat and video. Wealth management firms that embrace these technologies and train and empower advisors to use them effectively will ultimately win the war for talent, but very few are delivering the solutions that younger advisors demand.
“When it comes to technology, younger advisors score their firm low on reliability, relevance and responsiveness of support,” Foy added. “This group has high expectations and firms will need to raise the bar to meet them going forward.”
Top firms
Among employee advisors, the study found Edward Jones ranks highest in overall satisfaction with a score of 926. Raymond James & Associates (864) ranks second and Stifel, Nicolaus & Company (848) ranks third.
Among independent advisors, Commonwealth Financial ranks highest in overall satisfaction with a score of 960. Cambridge (873) ranks second and Raymond James Financial Services (869) ranks third.
The study measures satisfaction among those who are employed by an investment services firm and those who are affiliated with a broker-dealer but operate independently based on seven key factors (in alphabetical order): client support; compensation; firm leadership; operational support; problem resolution; professional development; and technology support.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
