December 11, 2023

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Financial advisors guiding clients through the first sustained bear market in a decade are sounding the alarm about impending retirement and a lack of time to talk to clients.

At least 28 percent of more than 4,000 employees and independent consultants told research and consulting firm JD Power that they don’t have enough time to talk to clients because their time is taken up by “non-value-added tasks such as compliance and sexual) occupation”.Administrative Responsibilities”, according to The Troy, Mich.-based company’s annual satisfaction study. The survey, released by JD Power on July 5, showed that men scored significantly lower than women. The firm conducted the survey ahead of the first half of 2023, when stocks performed better than many expected.

this Closely followed independent research Commonwealth Financial Network revealed Longtime Champion in Advisor SatisfactionBut Edward Jones’ laurels in employee agencies over the past decade or more have been lost to Stifel and Raymond James. Independents such as Raymond James and Ameriprise dominated other top spots.

(Scroll down to see the ranking of the 15 major companies)

Recruiters say low scores from staff and independent brokerages suggest advisor satisfaction is “a general industry condition rather than a huge variation from one channel to another” Mark Erzweig.

“When the market is volatile and the economy looks like it might be headed for a recession, it’s much less fun to be a financial advisor,” Erzweig said in an interview. “It’s exhausting, and during these times advisors have to spend a lot Extra time with clients. It makes sense to me that advisors would feel stretched and incompetent in this volatile market. Plenty of time to serve clients.”

Rising customer expectations for the level and type of service, including a greater emphasis on planning than in the past, could exacerbate this fatigue, he added. These trends, combined with a sharp drop in the value of stocks and bonds last year, may also prompt some advisers to retire early, Erzweig said.

According to the firm, JD Power adjusted this year’s version of the survey to be consistent with other wealth studies, using different sizes and weights in six categories than in past studies. “Many of the most important indicators” remain unchanged, Wealth and Loan Intelligence director Craig Martin said in an email.

“The new scale approach (from ‘Poor’ to ‘Perfect’) has been used in dozens of JD Power studies and consistently yields significantly lower scores than the old rating scale,” says Martin . “This does not reflect the decline in industry performance, but the adjustment of scale.”

With an average age of 56, one in five advisors told researchers they expected to retire in five years or less, highlighting the The industry’s ongoing need for succession planning.Significant gender differences remain in a markedly gender-differentiated occupation Less than a quarter of advisors are women, the results provide a possible bright spot in the higher ratings given by female brokers to firms. Their satisfaction rating is 59 points higher than the male average.

Martin said other issues about the lack of time available to clients and looming retirement served as red flags for brokerages.

“Under the difficult market conditions we’ve experienced over the past few years, great investment advisors distinguish themselves by proactively addressing their clients’ needs, providing comprehensive guidance, and communicating clearly and frequently on the issues that are most important to their clients,” Martin said in a statement. said in a statement.

“Currently, many advisors are struggling to find time to provide the actual level of service they know is critical to growing their business,” he continued. “They spend more time on administrative and compliance tasks, and in many cases, they start to question whether their companies are committed to providing them with the support and resources they need to succeed.”

See our slideshow for previous years’ results 2022, 2021, 2020, 2019, 2018 and 2017. To view JD Power’s latest annual research report, which ranks companies across the industry for full-service investor satisfaction, Click here.

Note: JD Power U.S. Financial Advisor Satisfaction Study Measured responses from 4,183 employees and independent consultants between December and April. For each firm with at least 100 participating advisors, Research Advisor Creates Satisfaction Index The scoring scale is 1,000 points and is based on six factors: “compensation, company leadership and culture, operational support, product and marketing, professional development and technology.” JD Power changed the weighting of categories in this year’s edition of the survey, resulting in significantly lower scores for all companies.