As the owner of a financial planning or wealth management firm, the satisfaction of your client base is your most important asset, and the advisors who work for you are your essential partners in that regard. But unlike other assets, client satisfaction and advisor satisfaction can't be bought, because having a happy group of clients plus an effective cadre of advisors is priceless.
To ensure your advisors are fulfilled in their role, you need to understand what they value. You need to know what drives their satisfaction, and you need to apply consistent effort to addressing their needs.
Luckily, practice owners have a valuable tool to assess the drivers of advisor satisfaction. The annual Financial Advisor Satisfaction Survey, conducted by J.D. Power and Associates, provides valuable insights to advisor behavior, from how they want to be compensated to the working conditions they prefer.
The survey is comprehensive, drawing data from more than 720,000 US-based individuals who hold a Series 6 or Series 7 license with FINRA. This extensive database gives further credence to the results of the study, and additional confidence for financial professionals who put it to good use.
Once J.D. Power has identified the individuals who will participate in its survey, participants are invited by mail to complete the survey online. The results are then compiled, giving the owners of financial planning and wealth management firms real insight into what their advisors want and how to address their needs most effectively.
Over the years, J.D. Power has compiled extensive information about advisor behavior and opinion, and has identified eight key drivers of advisor satisfaction. Practice owners would do well to incorporate this information into their operations. By addressing the eight key drivers, owners can improve their firm's performance results and AUM, as well as enhance the value of their brands while gaining new client referrals in the process.
Based on its annual surveys, J.D. Power has identified the following eight key drivers of advisor satisfaction:
It is easy to see how these factors, both individually and combined, help drive advisors' satisfaction. Of course, compensation and administrative support are important to all advisors, as are non-monetary issues such as the prompt resolution of problems and a positive working environment.
The performance of the firm is an important driver of advisor satisfaction since it engenders contented clients and underscores the ability to build long-term client relationships. Instead of wasting time trying to rationalize subpar performance to clients, advisors at top performing firms can confidently leverage the firm's performance toward attracting greater assets and high-quality referrals.
Administrative and compliance support is an often overlooked driver of advisor satisfaction, but it is nonetheless one of the most important. The regulatory environment can be confusing even for experienced advisors, and newcomers to the industry often find compliance a daunting task. By providing support for regulatory compliance and administrative issues, firm owners can enhance the satisfaction of their advisors and create a more efficient workplace.
The importance of compensation in helping to drive advisor satisfaction is self-evident. Financial advisors want to be adequately compensated for their time, dedication and expertise, and they look to the owner of the practice to provide an equitable compensation structure.
That compensation structure may consist of various individual parts, including salary and bonuses, health insurance and other fringe benefits, educational opportunities and retirement benefits. Job security is also factored into this driver of advisor satisfaction, and it is a major consideration among top performers.
Internal operational support is also important, and is a driver that practice owners have a great deal of control over. How the firm operates internally can have a profound impact on everything from how well (or poorly) it serves its clients to how much profit the firm can generate based on its current AUM. Practice owners can enhance the cost effectiveness and efficiency of their operations by using independent management tools like Truelytics, for example, to cost-effectively help optimize operations, lower costs, and enhance brand and client value.
Job duties provide another avenue for a practice owner to enhance the satisfaction of advisors and improve the results of their efforts. Advisors who don't feel challenged may become bored or even complacent, while those who are stretched too thinly may feel overwhelmed and start looking for opportunities elsewhere.
Striking a balance between too many and too few job duties can be intricate, but doing so is unmistakably tied to advisor satisfaction. Practice owners who understand the sensitivity of job duties and responsibilities, and are willing and able to address them conscientiously stand the best chance to profit greatly from getting it right.
Advisor satisfaction is also tied to the firm's products and offerings. Advisors are financial professionals. They want to serve their clients and help them achieve their long-term and short-term goals. But if they have a competitively limited set of products to choose from, they won't be able to adequately serve their clients' interests and they may feel stifled as a result.
That's why it is so important for practice owners to offer a comprehensive set of products, from low-cost index funds and ETFs to managed mutual funds, annuities and individual securities. By varying the selection of investment options, practice owners give their advisors more flexibility to attune to the individual needs of clients, which ultimately enriches the clients as well as the practice.
Finally, how important is a positive work environment? A seemingly rhetorical question, though in many cases an under-appreciated yet vitally important driver of advisor satisfaction. Creating a positive and productive work environment should be a no-brainer for every practice owner, because it can heavily impact a firm's stability and profitability, and mean the difference between a high turnover rate and a group of people who look forward to coming to work every day.
Understanding the factors that drive advisor satisfaction is an important part of running a financial planning or wealth management practice. If you haven't already done so, take some time to study the latest J.D. Power Financial Advisors Satisfaction Survey, and use its recommendations to fine-tune advisor satisfaction and your bottom line.
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