Broker and advisor feelings about the economy and financial markets are at their best since the 2008 financial crisis, according to Fidelity Investments' sixth annual "Broker and Advisor Sentiment Index" study, released today.
On a scale of 0 to 10, overall broker and advisor sentiment this year registers a 7.6, Fidelity said. This score is a composite that reflects their satisfaction in running their practices, their professional development and their work/life balance, among other things.
The higher score has prompted them to take action on generating new business, and they are placing greater importance on compensation, developing professionally and getting marketing support.
The average compensation and assets under management were the highest in the study's history, at approximately $236,000 and $56 million, respectively.The study also had good news for younger advisors and female planners. Gen X/Y advisors and women typically had higher assets under management (as did those who worked in teams and took their compensation in fees rather than commissions). That means those groups are likely to drive the future of the advice business.
Fidelity officials note that attitudes have changed since the last survey was conducted in 2010.
"Four years after the financial crisis, brokers and advisors are back in 'growth mode'--focused on developing themselves professionally and expanding their practices," said Sanjiv Mirchandani, the president of National Financial, a Fidelity Investments company, in a statement.
Other key findings from the survey include:
Gen X/Y takes on industry leadership. Today's advisor is, on average, 46 years old. Generations X and Y now represent more than half the industry.
Female advisors: generally successful but still a minority. The profession continues to be male-dominated, with men representing 87 percent of respondents and women representing 13 percent. Although women are still significantly underrepresented, more women are entering the field. The number of female advisors with less than five years' experience has increased 40 percent since 2010.
"Soloists" dominate, but team players have been far more profitable. Fifty-two percent of advisors work alone while 13 percent work in a team. But the number of those working in groups may increase as firms see the effect on compensation and AUM.
There's a continued migration toward fee-based compensation. Most of advisors' current compensation comes from commissions. However, more advisors indicated they would prefer it if their compensation structure shifted toward more fee-based business.
Bellomy Research, an independent third-party research firm, conducted the online survey for Fidelity from March 15 to March 29, talking to 1,207 advisors within different firm structures who work primarily with individual investors and manage a minimum of $10 million in assets under management. Of the advisors surveyed, 50 percent took commission, 10 percent took salary, 37 percent had fees based on assets, and 4 percent took some other form of compensation.
Fidelity had $3.7 trillion in assets under administration, including managed assets of $1.6 trillion, as of August 31.