Client Service July 10, 2024

J.D. Power Names Top 5 Firms With Highest Financial Adviser Satisfaction Ratings

Stifel and Commonwealth ranked highest among employee advisers and independent advisers, respectively.

Reported by

Stifel Financial Corp. ranked highest in overall satisfaction among employee advisers, while Commonwealth Financial Group Inc. placed first among independent advisers in satisfaction, according to the J.D. Power 2024 U.S. Financial Advisor Satisfaction Study released Tuesday.

The annual study measures the satisfaction of more than 4,000 financial advisers based on factors including compensation, leadership and culture, operational support, products and marketing and professional development and technology.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The overall adviser satisfaction index ranking, based on a 1,000-point scale, is as follows:

Employee Advisers Satisfaction  

  1. Stifel: 767
  2. Raymond James & Associates: 750
  3. Edward Jones: 740
  4. Merrill Lynch: 657
  5. Wells Fargo Advisors: 563

Independent Advisers Satisfaction

  1. Commonwealth: 819
  2. Raymond James Financial Services: 694
  3. Cambridge: 676
  4. Ameriprise: 641
  5. LPL Financial: 617

This year, independent adviser satisfaction fell, and employee adviser satisfaction increased, J.D. Power reported.

Employee adviser satisfaction jumped by 49 points to 637 in the past year; the total satisfaction score among independent advisers, on the other hand, decreased by 15 points to 611. According to J.D. Power, the finding is notable, as independent adviser satisfaction ratings have typically been higher than those of employee advisers. 

In the past year, major gains by employee advisers were due to significant enhancements in compensation-related metrics, perceptions of technology and quality of support, according to the study. 

Meanwhile, satisfaction with independent advisers decreased due to leadership-related reasons. The percentage of advisers who “strongly agree” that their company is moving in the correct direction has significantly decreased, to 46% in 2024 from 54% in 2023.

The employee-adviser segment has tended to be rather stable from an organizational standpoint in recent years, with limited mergers and acquisitions or other large company changes that tend to be disruptive to advisers, says Craig Martin, J.D. Power’s executive managing director and global head of wealth and lending intelligence. On the independent side, several firms have gone through major changes, including acquisitions, expansions and rebranding.

“M&A events can lead to a level of consternation among those acquired because they aren’t choosing to change,” says Martin. “At the same time, these events can also have a negative impact on existing advisers, as the resources and support are now shared with a larger workforce that can negatively impact service levels.”   

When comparing advisers who were willing to stay with their company with those who wanted to leave, the biggest discrepancy was in how they scored business culture and leadership. The survey found that 34% of employee advisers and 41% of independent advisers who are more than two years away from retirement indicated they might leave their current company in the next year or two. 

Furthermore, intended attrition does appear to translate to real attrition, as J.D. Power revealed half of the advisers who stated in 2021 that they “definitely will not” or “probably will not” be at the same company in one to two years had left by 2024.

To improve business culture and leadership, Martin recommends that companies ensure that there is empowered and effective leadership at multiple levels.

“Executive leaders can’t do it all, so it’s vital that at each level there is confidence in the respective management team,” he says. “Having leaders that are empowered to help address those challenges and a culture that encourages constructive feedback is key.”

Martin also suggests providing consistent and transparent communication. He says leaders are often so deeply entrenched in the decisionmaking process that they fail to recognize that all parties may not be fully informed.

“A good example of this is technology, where major investments are made to upgrade systems with the best of intentions; the challenge is that, often, the end user only knows what they are experiencing in the moment, and the benefits aren’t as clear,” he says. “It’s vital to not just explain what is happening, but to also ensure clarity on the how and why of the actions being taken.”  

The study was conducted from January through May and based on replies from 4,072 independent and employee financial advisers. 

Client Service July 9, 2024

Vanguard Leans Into DC Adviser Outreach

The recordkeeper and asset manager has made recent investments in consultant relationships as a tactic to grow its workplace plan and participant numbers.

Reported by

Vanguard has maintained its third-place position nationally for overseeing the most 401(k) assets among recordkeepers, according to recent defined contribution data released by PLANSPONSOR. Part of maintaining that spot, while also growing assets, has been an effort in recent years to bolster its team working with defined contribution consultants and advisers, according to top executives.

Vanguard, as both a large recordkeeper and the country’s largest provider of target-date funds, has multiple touchpoints with workplace savings, including through its defined contribution investment only asset management distribution and managed account offerings. But in recent years, the firm has also added hires and restructured its DC consultant and adviser outreach division to influence and serve the adviser space, says Jane Greenfield, a principal and head of consultant relations for institutional retirement.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

“We hired more sales executives and structured them in teams to serve their key accounts,” Greenfield explains. “It gives them the opportunity to cover both the home office and the field by taking a team approach for a particular consultant.”

The focus on workplace engagement came under former CEO Tim Buckley, who retired, as of Monday, after 30 years at the firm. The new firm head, Salim Ramji, comes from BlackRock Inc., where he was head of the firm’s iShares exchange-traded-funds division.

Ramji is the first external hire to take over as CEO. He  takes over after Vanguard made several moves under Buckley to hone its business areas. Those included selling its U.S.-based outsourced chief investment officer business to Mercer and shedding its individual 401(k), multi-SEP and SIMPLE IRA plan business in a sale to Ascensus. Those businesses sat under Vanguard’s financial advisement business, not its institutional retirement unit, according to a spokesperson.

BlackRock, Ramji’s former employer, has also made a public push into retirement plans recently, with Chairman and CEO Larry Fink using his annual letter to focus investors on a retirement “rethink,” including the use of a new BlackRock in-plan annuity option called LifePath Paycheck.

DC Focus

While the direction Ramji takes Vanguard will start to take shape in coming months, Vanguard has historically been a firm that does not grow through acquisitions, but by creating business lines from within. Part of that growth has been coming from, and will continue to come from, serving the workplace savings market, says Greenfield.

She believes employee needs and expectations have grown in recent years, and participant “reliance on the DC plan [and related benefits] is as high as it’s ever been.”

Greenfield says the firm’s DC consultant-facing team and approach has led to more consistent messaging and a reliable contact person to answer questions and work through issues for advisories working with plan sponsors. The goal of those relationships is to ensure plan sponsor consultants are getting their clients the right Vanguard offerings for their participant pool. It also helps with basic blocking and tackling for an adviser with their plan sponsor client, according to Greenfield.

“If we have something that needs to go out to a plan sponsor, the first call is going to be to the consultant—we don’t want our consultants to be caught on their heels when answering questions from a plan sponsor,” she says.

In PLANSPONSOR’s 2024 DC Benchmarking Survey, Vanguard reported $616 billion in 401(k) assets, sitting behind Fidelity Investments’ $2.9 trillion and Empower’s $1.1 trillion. PLANSPONSOR is the sister publication of PLANADVISER. Vanguard remains the largest TDF manager by assets, according to data from Simfund, which, like PLANADVISER, is owned by ISS STOXX.

Workplace Engagement

Matt Brancato, a principal and chief client officer of institutional for Vanguard, says the retirement industry as a whole is moving into a “third DC era” in which the industry is going away from just “getting investments on the shelf” to using behavioral finance techniques and technology to further participant engagement. Brancato, who works directly with plan sponsors for Vanguard, notes that the firm “doesn’t take for granted” that engagement.

He notes that the Vanguard’s financial wellness hub has an 80% completion rate for participants who sign on, in part due to using technology to “get in front of people at the right time.”

Meanwhile, he sees three areas of development to increase personalized saving and financial planning: an artificial intelligence-backed personalization engine to connect with participants; editorial and behavioral tools to prompt action; and machine learning to help identify the best action.

There is certainly still more to do. In Vanguard’s latest America Saves report, the firm noted that, while more plan sponsors are offering managed account offerings with advice, the percent of participants taking advantage of them has held steady at about 7% dating back to 2020. Meanwhile, among participants in managed accounts being offered to use advice, only 10% overall are leveraging the service.

Moving such offerings forward may, in part, rely on how well the offerings flow from advisers to plan sponsors to the end participant. That, Greenfield says, is where her team’s focus will continue to support success, along with, ideally, bringing on more plan management overall.

“We’re building an organization focused on serving both consultants and plan sponsors in order to bring the mission to participants through every single interaction,” Greenfield says. “That focus has helped significantly increase our win rate [among plan sponsors].”

«