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Data & Research July 8, 2021
Wirehouse Advisers Less Satisfied Than Others
In a J.D. Power survey, independent advisory firms were more likely to have a higher satisfaction score than employee groups.
Reported by Amanda Umpierrez
As the United States prepares for a post-pandemic world, some financial advisers say they are still feeling a lack of support from their employers, even as the current financial markets boosted satisfaction for others.
The “J.D. Power 2021 U.S. Financial Advisor Satisfaction Study” said wirehouse advisers are reporting several problems with their firms. Wirehouse advisers said they experienced significantly lower levels of support from their firm, along with a greater disruption of business services and more difficulty transitioning to remote work, than advisers employed by non-wirehouse and independent advisory firms. The study is based on responses from more than 3,000 employee and independent financial advisers.
While independent advisers are affiliated with a broker/dealer (B/D) but operate individually, employee advisers work for an investment services firm.
According to the report, wirehouse firms are falling short of adviser expectations, with 34% of employee advisers reporting reduced levels of support from the home office and 29% saying they’ve experienced a disruption of business services. These advisers also cited higher levels of difficulty when transitioning to remote work than other advisers, according to J.D. Power.
Dissatisfied advisers said they were more than three times as likely to switch firms than advisers who were satisfied with their jobs. When tracking firm-level adviser satisfaction scores from 2018 through 2021, J.D. Power found 18% of advisers who worked for firms with the lowest adviser satisfaction scores ended up switching firms during that period.
“Adviser satisfaction is directly linked to retention and brand advocacy, so firms that want to get the most out of their advisers need to invest in providing them with the best tools and support to do their jobs effectively under all circumstances,” says Mike Foy, senior director of wealth and lending intelligence at J.D. Power. “This year has been especially challenging, and this study identifies some firms that clearly did a better job than others in meeting those challenges.”
As part of the study, advisers also ranked employee and independent advisory groups based on compensation, leadership and culture, operational support, products and marketing, professional development, and technology.
Edward Jones ranked first in overall adviser satisfaction in the employee adviser group, with a score of 890 on a 1,000-point scale. Following Edward Jones were Raymond James & Associates at 864, Stifel at 857, Ameriprise at 789, Morgan Stanley at 757, Merrill Lynch at 698, UBS at 627 and Wells Fargo Advisors at 577.
Independent firms received higher scores overall than employee-based adviser firms, with the highest ranking at 936 for Commonwealth. Raymond James Financial Services scored at 853 in its ranking, and Cambridge received a ranking of 842. Other firms reviewed include Northwestern Mutual (828), Ameriprise (827), LPL Financial (817), Cetera (777) and Advisor Group (710).
More information on the study can be found here.
