Data & Research October 1, 2008

Edward Jones, Raymond James Can Boast Most Satisfied Advisers

The J.D. Power and Associates 2008 Financial Advisor Satisfaction Survey found that a firm’s performance was the key driver of satisfaction among employee advisers.
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Edward Jones and Raymond James and Associates tie to rank highest in the study, with each receiving an index score of 879 on a 1,000-point scale. Edward Jones performs particularly well in providing a satisfying work environment and supporting its advisers, according to a J.D. Power and Associates press release. The firm takes the gold for the second year in a row (“Happiest Advisers Found at Edward Jones“). Raymond James and Associates performs particularly well in the job duties, products and offerings, compensation, and firm performance factors, the release said.

The study measures the satisfaction of both employee advisers and independent advisers affiliated with a broker/dealer. The average score was 655 among the six firms that had a large enough sample to be ranked. Merrill Lynch received a score of 697; Wachovia Securities, 627; Citigroup Global Markets, 624; and UBS Financial Services, 598.

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The study found that among employee advisers, the most important driver of satisfaction is firm performance, which affects adviser compensation. Both Raymond James and Edward Jones scored at the top of a J.D. Power and Associates survey released earlier this year measuring investor satisfaction (see “Good Investment Performances Equals Investor Satisfaction“), in which performance proved to be a large factor in investor satisfaction.

Among independent advisers, support is of primary importance. Among independent advisers, J.D. Power Associates said that Ameriprise Financial Services, LPL Financial Services, and Raymond James Financial Services all performed particularly well.

The study examined eight key drivers of employee adviser satisfaction: internal operational support/people; administrative and compliance support; work environment; firm performance; compensation; products and offerings; problem resolution; and job duties. J.D. Power and Associates said attracting new clients and accumulating assets continue to be key concerns for advisers. Also critical are coping with market volatility and receiving adequate compliance, technology, and product support from firms.

“In this situation, it’s tempting to cut spending—particularly with regard to support functions and customer service—to combat financial challenges,’ said David Lo, director of investment services at J.D. Power and Associates, in the release. “However, one of the most important actions is to renew focus on the adviser experience. Providing premium operational and administrative support will help ease concerns and allow advisers to grow their business and offer top-notch service to their clients.’

The study is based on responses from 3,124 financial advisers who are registered with the Financial Industry Regulatory Authority (FINRA). The survey was conducted online between May and June 2008.

Data & Research October 1, 2008

Economy Fears Affect Small Business Owners’ Retirement Savings

A growing number of small businesses are feeling the stress of the tough economy, leading many to cut back on retirement savings or raid their accounts, according to a survey by ING DIRECT’s ShareBuilder 401k.
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More than half of survey respondents say they are now saving less money both for personal reasons (56%) and for retirement (53%) compared to a year ago, according to a press release of the results. Eleven percent also report reducing or eliminating matches for their employees, and 16% have taken premature withdrawals or borrowed from their retirement accounts.

The report also found that nearly six out of 10 small business owners feel there are not enough incentives in place to help them start a 401(k), the release said. The number of small business owners with some sort of retirement plan dropped from 35% in 2007 to 26% in 2008. Of those operating without a retirement plan, 45% say they are now less likely to start a 401(k) plan compared to a year ago.

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Other survey findings included:

  • 63% of small business employers say are either very or extremely concerned about the future of the economy;
  • 57% see developing new business as their number one challenge through the remainder of the year, and “access to cash” ranked numbertwo at 18%;
  • 40% see the current financial state of their business as worse than a year ago.

Data came from the 2008 Small Business Annual Retirement Trends (SBART) report—an annual survey commissioned by ING DIRECT’s ShareBuilder 401k, conducted online within the U.S. by Harris Interactive from July 29 through August 25. The survey included 512 small business employers (owners, partners CEOs, chairmen, and presidents with 1 to 50 employees).

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