Getting Back on Stable Ground

The “J.D. Power and Associates 2010 U.S. Financial Advisor Satisfaction Study” looked at the satisfaction levels of both “employee-advisers” (those who are employed by their investment services firm) and independent advisers (those who are affiliated with a broker/dealer but operate independently).

The study examined eight key drivers of each type of adviser, which differed only slightly from one another. Satisfaction among the employee-adviser group was weighed for firm performance, compensation, work environment, products/offerings, technology, job duties, contact, and people. The eight key drivers of satisfaction among independent advisers were firm performance, people, technology, compensation, contact, job duties, products for clients, and offerings for adviser.

The study found that a majority of the best practices that drive adviser satisfaction center on maximizing the time advisers can spend with clients and minimizing time spent on administrative activities. For example, among employee-advisers, best practices include providing dedicated compliance support; software programs that are aligned with daily workflow processes; and same-day contact from IT support. Likewise, for independent advisers, best practices include adjusting the workload so that only 15% or less of a typical week is spent on compliance-related tasks such as paperwork, and providing completely integrated software programs.

The study also found that adviser perceptions of their firm’s financial stability have improved markedly since 2008. Perceptions of financial stability of wirehouses have improved to 5.4 (on a 7-point scale) in 2010 from 4.6 in 2008. While advisers’ perceptions of the financial stability of independent firms have improved to 6.3 in 2010 from 6.0 in 2008, they still trail those of advisers of non-wirehouse firms (6.5 in 2010).

“As the financial troubles, compliance violations and merger and acquisition activity of some of the largest wealth management institutions begin to fade from memory, sentiment among financial advisers appears to be settling back in place,” said David Lo, director of investment services at J.D. Power and Associates. “Perceptions of financial stability hit a low point in 2008, but now appear to be improving. This is particularly important because brand image is such an important element that drives advisers’ perceptions of their firms overall.”

Edward Jones ranks highest in overall satisfaction among employee-advisers and Commonwealth Financial Network ranks highest in overall satisfaction among independent advisers. The 2010 U.S. Financial Advisor Satisfaction Study is based on responses from more than 2,800 financial advisers who hold a Series 7 license. The study was conducted in two waves between February and March 2010 and July and September 2010.