Scores are down from a year ago but the top performers remain the same in the latest iteration of J.D. Power’s U.S. Financial Advisor Satisfaction Study, released today.
The data and analytics giant ranks the broker-dealers that outperform by surveying financial advisors and their levels of satisfaction with each firm based on a number of variables.
Among employee advisors, Edward Jones keeps its stranglehold on the top spot, ranking highest in overall satisfaction. Edward Jones also had the top spot in the 2021 and 2020 rankings, but the winning scores have decreased from 920 in 2020 and 890 in 2021 to 876 this year (out of 1,000).
This still compares favorably to the average score of 745 among the seven employee-advisor firms. It is the 13th time Edward Jones has been ranked highest in the employee advisor segment of the J.D. Power survey.
“Edward Jones’ ongoing success in delivering a best-in-class experience for financial advisors in all kinds of market and economic conditions reflects an unwavering commitment to investing in the advisor as central to the success of both the firm and the client,” said Mike Foy, Senior Director of Wealth Intelligence at J.D. Power.
“Our firm is built on relationships, and we invest deeply in them,” commented Ken Cella, head of Branch Development at Edward Jones, about the rankings. “Our nearly 19,000 financial advisors are human-centered in their approach and in more communities than anyone in our industry. These unique differentiators enable them to serve, guided by our purpose, values and mindsets that are the hallmarks of our first century in business. As our stakeholders change in unprecedented ways: what they need, what they value, and what it will take to help them achieve financially what is most important. We’ll continue to offer our financial advisors flexibility, choice and support to serve their clients and their communities.”
Stifel leapfrogged Raymond James & Associates to claim the second spot with a score of 872 (rising from last year’s third-place score of 857) while Raymond James ranks third with a score of 863 (853 last year).
Among independent advisors, Commonwealth once again ranks highest in overall satisfaction with a score of 918 (down from 936 last year). Raymond James Financial Services (842) ranks second (853 last year) and Ameriprise supplanted Cambridge for the third spot with a score of 821.
Outpacing the next-highest-ranked firm by 76 points, Commonwealth achieved the highest score in all reported key drivers of advisor satisfaction.
“We owe our advisors a debt of gratitude for acknowledging our efforts this way. But even more so for setting the kind of example—through their own agility and resilience—that motivates and inspires our entire Commonwealth team to go the extra mile to help them help their clients,” said Commonwealth CEO Wayne Bloom. “Given the challenges across the board in our industry these last few years, this recognition is especially humbling.”
Bloom credits the year’s success in part to Commonwealth’s redoubling its commitment to fostering a thriving community with the creation of a new Community business unit, dedicated to forging fulfilling connections across Commonwealth through signature events, networking experiences, and shared learning.
“Over time, we’ve learned from our advisors that it’s not just about what we deliver, it’s how. And a big part of the ‘how’ is rooted in the strength of our community,” noted Bloom. “Our advisors have a voice here. We hear them loud and clear, and we make investments and adjustments in response to their feedback and to anticipate their evolving needs. We have established tools and experiences that enable them to keep connected and tap one another to share insights and best practices.”
The U.S. Financial Advisor Satisfaction Study measures satisfaction among both employee advisors (those who are employed by an investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently) based on six key factors (in alphabetical order): compensation; leadership and culture; operational support; products and marketing; professional development; and technology.
Managing advisor attrition rates
Long before the Great Resignation became a national phenomenon, wealth management firms were struggling to manage attrition among their financial advisors and attract new talent to the profession.
This year’s survey finds a combination of technological- and pandemic-driven disruption has exacerbated that challenge, with 15% of advisors at wirehouse firms and 7% of independent advisors now categorized as “at risk” of leaving their firms in the next two years.
“With the average age of a financial advisor climbing to 57 this year, wealth management firms that want to continue to grow must do more than just manage advisor attrition rates; they also need to actively create advisor brand evangelists who will attract the next generation of talent,” Foy said. “Right now, many firms are missing the mark on developing that level of advisor engagement, but there are some clear drivers that need to be in place for it to happen. Notably, firms that are making the right investments in technology, effective marketing support, competitive products and services and have a strong top-down corporate culture are significantly outperforming the competition when it comes to advisor satisfaction and advocacy.”
Following are additional key findings of the 2022 study:
- Tech, competitive products and culture help build advisor advocacy: Among advisors classified as brand evangelists—those with the highest levels of satisfaction and loyalty to their firms—91% say the technology offered by their firm has improved during the past two years. Likewise, 79% say their firm offers competitive products and services and 74% say their firm’s corporate leadership fosters a strong culture.
- Employee advisor satisfaction declines significantly with length of tenure: While overall satisfaction among independent advisors is relatively consistent across all advisor tenure levels, it declines significantly among employee advisors based on the length of their industry tenure. Overall satisfaction is 741 (on a 1,000-point scale) among employee advisors in their first 10 years of tenure and falls to 689 among mid-career employee advisors and to 658 among those with a tenure of 20 years or more. This represents a huge risk as experienced advisors obviously have accumulated significant assets that will very often leave the firm if the advisor departs.
- Advisors want to go back to the office: A majority (62%) of advisors say their preferred work style is either in the office most of the time (38%) or in the office full-time (24%). Overall satisfaction scores are highest among advisors who are currently working in the office full time (791), followed by those who are working in the office most of the time (778).
The study is based on responses from 3,039 employee and independent financial advisors and was fielded from January through May 2022.
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