Best & Worst Firms for Advisor Satisfaction: J.D. Power, 2023
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When market conditions are difficult, the best investment advisors proactively address their clients’ needs by delivering comprehensive guidance and communicating clearly and frequently about what matters most to their clients, according to Craig Martin, global head of wealth and lending intelligence at J.D. Power.
But today, that’s easier said than done.
In J.D. Power’s 2023 U.S. Financial Advisor Satisfaction Study, released Wednesday, 28% of advisors say they do not have enough time to spend with clients. Advisors in this group say they spend an average of 41% more time each month than their peers on non-value-added tasks.
“Right now, many advisors are struggling to find the time to deliver the level of hands-on service they know is critical to growing their business,” Martin said in a statement. “They’re spending more time on administrative and compliance-oriented tasks and, in many cases, they are starting to question whether their firm is committed to providing them with the support and resources they need to succeed.”
For these advisors, Net Promoter Scores, a measure of advisor advocacy, are 27 points lower (on a -100 to 100 scale) among employee advisors and 30 points lower among independent advisors when compared with advisors who say they do have enough time to spend with clients.
J.D. Power noted that its financial advisor satisfaction study was redesigned for 2023. It measures satisfaction among both employee advisors who work for an investment services firm and independent advisors who are affiliated with a broker-dealer but operate independently, based on these factors:
Compensation
Firm leadership and culture
Operational support
Products and marketing
Professional development
Technology
J.D. Power fielded the study from December through April and received responses from 4,183 employee and independent financial advisors.
See the slideshow for the firms that rated best and worst among employee advisors and independent advisors.
Firm Satisfaction and Commitment
U.S. financial advisors on average are 56 years old, and 20% or respondents said they are five years or less away from retirement. In addition, 30% of employee advisors and 28% of independent ones said they “probably will” rather than “definitely will” be working for their current firm in the next one to two years.
This suggests, J.D. Power said, that even if advisors are not contemplating leaving the industry or their firm, many may become apathetic about their situation. Overall satisfaction and NPS scores are significantly higher among advisors who said they are strongly committed to their firms.
Among investment firm employees, female advisors have significantly higher NPS scores than their male counterparts. The overall satisfaction score among female employee advisors is 637 (on a 1,000-point scale) and the average NPS is 59, which compares with 578 and 36 for male employee advisors.
For independent advisors, the study found no material difference in overall satisfaction and NPS scores between genders.
According to the survey, employee advisors who are most likely to stay with their firm for the long term said their main reasons for doing so are a strong culture and company leadership. Other key factors influencing them are technology and professional development support and training.
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