Broker, Adviser Outlook Rebounds to Pre-Crisis Levels

Fidelity Investment’s Broker and Advisor Sentiment Index measures 7.6 on a scale of zero to 10.

Adviser sentiment is the highest it has been since the financial crisis of 2008, Fidelity said. Based on a survey of 1,207 advisers, the index is now in its sixth year.

With their confidence in the business buoyed, brokers and advisers are directing their focus on expanding and marketing their business, developing professionally and revisiting their compensation model, Fidelity said.

Fee-based advisers and brokers have 31% higher assets under management than commission-based advisers, and earn 44% more, the survey found. More than half of advisers and brokers (52%) are predominantly commission-based, and 33% are fee-based.

As a result of the success of fee-based advisers, Fidelity encourages firm leaders to support advisers who want to move to this model. “Advisers have expressed a desire to build up their fee-based business, especially teamed and Gen X/Y advisers,” Fidelity said. “Consider providing tools that can help advisers evaluate their current book and compensation structure, plan for the transition and realistically understand the time and effort required.”

Looking to the demographic composition of the broker and adviser population, Fidelity found that 57% of those in the profession are Gen X/Y compared with 43% in the Baby Boomers or Seniors age group, and that the average age of all advisers is 46. While 87% of all advisers are male, and 52% of all advisers are solo practitioners versus members of a team (13%), that appears to be slowing changing, Fidelity said.

“Aligning growth strategies to reflect these key segments and advice models may help drive profitability for brokers, advisers and their firms, and better serve their clients,” said Michael R. Durbin, president, Fidelity Institutional Wealth Services. “With investor demographics and needs constantly shifting, it is critical for firm leaders to consider how their talent strategies and advice models align with those shifts.”