Financial advisors are grappling with time constraints and considering exit strategies as a result of market challenges, growing compliance demands and growing older, according to the new J.D. Power 2023 U.S. Financial Advisor Satisfaction Study.
A key concern raised by advisors is the lack of time available for client interactions. Approximately 28% of advisors admit they do not have enough time to spend with clients. These advisors spend an average of 41% more time on non-value-added tasks, such as compliance and administrative duties, compared with their peers who can dedicate more time to client-focused activities. The study reveals that advisors with insufficient time exhibit lower Net Promoter Scores (NPS), a measure of advisor advocacy.
The study also highlights the impending retirement wave within the industry. Approximately 20% of financial advisors state that they are five years or less away from retirement. Moreover, a significant portion of employee advisors (30%) and independent advisors (28%) express uncertainty about remaining with their current firms in the next one to two years. This potential lack of commitment could negatively impact advisor satisfaction levels and hinder talent retention efforts.
Female advisors report greater job satisfaction and advocacy
Notably, female employee advisors outshine their male counterparts in overall satisfaction and advocacy, with an overall satisfaction score of 637 and an average NPS of 59, compared to 578 and 36, respectively, for male employee advisors.
The study underscores the importance of strong leadership, support, and professional development in retaining advisors. Advisors who are committed to their firms cite a strong culture and company leadership as the top reasons for their loyalty. Professional development opportunities, training programs, and advanced technology also play significant roles in advisor satisfaction and retention.
Commonwealth Financial Network, based in Waltham, Mass., once again emerged as the top-ranked firm in independent advisor satisfaction with a score of 798, the highest score of any kind of advisory firm. This marks the firm’s tenth consecutive win in this category. Raymond James Financial Services takes the second position with a score of 697, while Ameriprise and Cambridge tie for third place at 664.
Stifel claimed the top position among employee advisors with a score of 777. Raymond James & Associates secures the second spot, followed by Edward Jones at 672.
The J.D. Power study, which surveyed 4,183 employee and independent financial advisors, assessed satisfaction based on six key factors: compensation, firm leadership and culture, operational support, products and marketing, professional development, and technology. The survey was conducted from December 2022 to April 2023.
