“ advisor loyalty is declining ,” said mike foy , senior director of wealth and lending intelligence at J . d . power , in an interview with Financial Advisor . “ with the average age of a financial advisor climbing to 57 this year , wealth management firms that want to continue to grow must do more than just manage advisor attrition rates ; they also need to actively create advisor brand evangelists who will attract the next generation of talent .” this is the first time J . d . power created and used the “ brand evangelist ” category “ to really differentiate between firms that create them and those that instead create advisors who are compliant passives — who aren ’ t looking to leave , but aren ’ t advocating on behalf of any broker-dealer ’ s brand or likely to recommend the firm to peers either ,” foy said .

“ we ’ re taking a closer look because you need to do more than just prevent attrition ; you need to create brand evangelists ,” he said . among employee advisors , edward Jones ranks highest in the study ’ s overall satisfaction category with a score of 876 ( on a 1,000 point scale ). stifel ranks second ( with a score of 872 ) and raymond James & associates ranks third ( at 863 ). among independent advisors , commonwealth financial network ranks highest in overall satisfaction with a score of 918 . raymond James financial services ranks second ( at 842 ) and ameriprise ranks third ( with a score of 821 ). morgan stanley , which has invested millions to develop its wealth management platform and attract advisors , is also gaining ground in advisor satisfaction , foy said .

“ when we think about firms that are making culture shifts , morgan stanley is the best example of a wirehouse where we see

“ Wealth management firms ... need to actively create advisor brand evangelists who will attract the next generation of talent .”

— Mike foy , J . D . Power

significant improvements looking back over the past couple of years ,” he said . “ they have really created some distance from their more direct peers in the wirehouse group .” ameriprise has also improved advisor loyalty , he added . “ it ’ s not easy to change culture at firms of these [ sizes ] when you ’ re dealing with 10,000 or 20,000 advisors who view themselves as small business owners , even if some aren ’ t literally . changing culture is a long-term proposition .” meanwhile , firms facing public scandals and run-ins with regulators , such as wells fargo and merrill lynch , have taken a hit in advisor retention and loyalty , he noted . the study made several observations about advisor behavior :

• advisors become advocates for their firms when the technology is good and the products competitive . “ among advisors classified as brand ‘ evangelists ’— those with the highest levels of satisfaction and loyalty to their firms — 91 % say the technology offered by their firm has improved during the past two years . likewise , 79 % say their firm offers competitive products and services and 74 % say their firm ’ s corporate leadership fosters a strong culture ,”

J . d . power found .

• employee advisors are less satisfied the longer they ’ re with a firm . “ while overall satisfaction among independent advisors is relatively consistent across all advisor tenure levels , it declines significantly among employee advisors based on the length of their industry tenure . overall satisfaction is 741 among employee advisors in their first 10 years of tenure and falls to 689 among mid-career employee advisors and to 658 among those with a tenure of 20 years or more . this represents a huge risk , as experienced advisors obviously have accumulated significant assets that will very often leave the firm if the advisor departs ,” the report said .

• “ a majority ( 62 %) of advisors ,” the study said , “ say their preferred work style is either in the office most of the time ( 38 %) or in the office full time ( 24 %). overall satisfaction scores are highest among advisors who are currently working in the office full time ( 791 ), followed by those who are working in the office most of the time ( 778 ).” foy said there is “ a widening gap ” between the better performing firms and the worst firms , and added that the industry should take note .

“ i don ’ t think it ’ s shocking , but it ’ s clear that it will be easier for companies that create a strong band and develop brand evangelists to recruit and grow in the future ,” he added .

— tracey Longo

14 | financial advisor magazine | september 2022 www . fa-mag . com