A new job satisfaction study by J.D. Power has found that financial advisors' happiness with their work is most dependent on their firm's performance. The market research company, in its "2012 U.S. Financial Advisor Satisfaction Study," ranked job satisfaction among both employee advisors and reps with independent B-Ds, as well as ranking firms and broker/dealers for the best job satisfaction rate among their advisors.
Edward Jones ranked highest for job satisfaction for the second year in a row among advisors who are employed by a firm, earning a score of 901 from a possible 1,000. Raymond James & Associates Inc. came in second with a score of 864 and Charles Schwab & Co. Inc. ranked third with a score of 823. Each was above the industry average for job satisfaction, 698.
Of the eight companies ranked, Wells Fargo Advisors came in last at 633.
For independent advisors associated with a broker-dealer but operating independently, Commonwealth Financial Network came in first with a job satisfaction rating of 917 compared with an industry average of 774.
Raymond James Financial Services was second with a score of 887 and Northwestern Mutual Investment Services was third with 831. Of the nine firms included, NFP Securities Inc. came in last with a score of 740.
For employee advisors, the study ranked job satisfaction by firm performance; compensation; contact with people at the firm; people; job duties; work environment; products and offerings to clients; technology; and the services and support offered them. The same factors were considered for independent advisors, except work environment was eliminated.
Performance Most Important Factor
Among both groups of advisors, firm performance was rated as the most important factor for satisfaction. Other key components of job satisfaction were the advisors' perceptions of their firms, including the senior management's support of the firm's mission and values. It was also important that the firm have a clear set of priorities and objectives and that it act in the best interests of the clients.
Advisors are less satisfied when senior management is involved in pushing non-investment products and services, and when management keeps advisors from doing one-on-one work with clients by assigning excessive administrative duties, says David Lo, the director of investment services at J.D. Power and Associates.
Compensation Not Top Priority
Advisors are also more satisfied when a firm uses best practices for compliance and when it offers administrative and technology support, the survey shows, integrating technology and software solutions with work-flow processes. It's also important to advisors that their firms address and resolve compliance issues quickly and efficiently.
When a firm offers the right mix of technology and support for advisors, they can spend more time with clients, and that has the biggest impact on satisfaction, according to Lo.
"It is no coincidence that the firms struggling with the key best practices identified in the study are also paying the highest retention and signing bonuses to compensate for poorer work experience," he says.
The study shows that firms following best practices for performance, technology, compliance and administration boasted the highest levels of job satisfaction, even when their advisors received compensation lower than industry averages.
"Ultimately, financial advisors want to work with a firm whose actions are in the best interest of clients," Lo says. "Firms that stray from this fundamental principle diminish the connection with their advisors and eventually damage the overall culture of the firm."
J.D. Power is also conducting surveys of the clients' satisfaction, to be released soon. Firms that score well on client surveys also seem to score well with advisors, Lo says.