Good times are here again for financial advisors.
A Financial Advisor Satisfaction Study conducted by J.D. Power and Associates found that perceptions of financial stability of wirehouses and independent firms have improved since 2008. More than 2,800 financial advisors who hold a Series 7 license responded to the survey.
In 2008, perceptions of financial stability among wirehouse advisors hovered at 4.6 on a 7-point scale. In 2010, that number has increased to 5.4. For employees of independent firms, their score improved to 6.3 in 2010 from 6.0 in 2008. Advisors at non-wirehouse firms are still the most content, however, with a score of 6.5
"It's a recovery, if you will," said David Lo, director of investment services at J.D. Power and Associates. "In 2007 and 2008, the floor dropped. Fast-forward two years and we see financial stability among the wirehouses."
When it comes to firms where advisors are happiest, non-wirehouse firms are leading the pack. Edward Jones ranks the highest in overall satisfaction among employee advisors -- it scored 876 on a 1,000-point scale.
What drives such satisfaction? Work environment and job duties are two areas that advisors find favorable.
Raymond James isn't far behind Edward Jones, coming in at a score of 857. Advisors there particularly appreciate the compensation. Merrill Lynch comes in third with 710 points. Morgan Stanley Smith Barney ranks a dismal 626 to come in last place.
Lo said that non-wirehouses have done well in the rankings since 2007, and that the marriage between Citigroup and Morgan Stanley has caused some integration problems.
"We see from an M&A standpoint that there's often challenges with it," he said. "There's definitely potential for a transition to be bumpy." He also noted that wirehouses don't perform as well comparatively on key measures that drive advisor satisfaction.
On the independent advisor side, Commonwealth Financial Network scored the highest with 898, followed by Cambridge Investment Research Advisors with 848. Metlife Broker Dealer Group came in last with 648.
The survey also found that advisors are happiest when they can spend the most time with their clients. Firms that minimize the administrative burden, make IT support available and decrease the paperwork score well with advisors.
"Compensation is going to be based on production," Lo said, "So the more time they can be out there talking to their clients and less time they're bogged down with paperwork, the better."
For the next year, Lo expects increased advisor contentment as movement between firms stabilizes. At this point though, if you're looking to be a financial advisor, non-wirehouse firms seem to be the happiest places.
Write to Julie Steinberg