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Advisers remain stressed but professionally satisfied, says FlexShares survey

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Financial advisers are 23 per cent more stressed than the US national average, down only slightly from last year’s 25 per cent, but nonetheless remain overwhelmingly satisfied with their career choice, according to the second annual financial adviser wellness survey by FlexShares Exchange Traded Funds.

According to the survey, advisers reported 79 per cent job satisfaction overall, with those who manage over USD250 million in assets reporting 12 per cent higher satisfaction than their peers with fewer assets under management.
 
The survey of over 600 advisers found that challenges associated with growing their practices (27 per cent) and compliance and regulatory issues (19 per cent) continue to be the top stress inducers, with nearly half of those surveyed citing these as their primary sources of work-related stress. However, new sources of stress arose in 2018 as well, including political uncertainty and market volatility. Advisers ranked ‘political uncertainty,’ a new choice in the survey this year, as the top source of stress behind compliance and client growth at 18.5 per cent and 27.2 per cent respectively. Furthermore, while the state of the markets ranked relatively low on advisers’ list of stress-inducers for 2017, it increased by almost 19 per cent in 2018.
 
“Despite growing pressures posed by factors outside of advisers’ control, like political risk and market volatility, advisers remain highly satisfied with their career choice,” says Darek Wojnar, Head of Funds and Managed Accounts. “To maintain this level of satisfaction potentially heading into an increasingly volatile market, it’s critical for advisers to seek out investment solutions that can meet their investment and business goals over the long-term and to devote the time needed to create an exceptional client experience.”
 
New to the study this year, FlexShares further analysed specific areas of stress and the breakdown of results across the advisor space. They found that advisor stress levels varied based on the type of firm and services offered, particularly in response to certain areas such as fees and regulation. RIA respondents indicated fee and margin pressure as the least concerning business stressor compared to their peers, whereas regional advisory firms reported the highest levels of stress in that area. Furthermore, in an open-ended question about stress related to regulatory changes, RIAs were more likely to describe these changes as “not stressful,” compared to wirehouse advisers who described new regulation as posing “business risks” and “interfering with client perceptions.”
 
The survey also found differences among advisers based on the level of services offered to clients. Advisers who described their role more holistically in terms of “wealth management” or “financial planning,” were 31 per cent more stressed than those who described their role solely in terms of “investment management.”
 
“As advisers shift towards managing an increasing portion of their clients’ financial lives through comprehensive wealth planning, our results show this may lead to greater levels of stress,” said David Partain, Head of Marketing at FlexShares. “By working with external partners that prioritize their success and well-being, advisers can better manage these changes and lead more fulfilling, satisfied lives.”
 
In addition to identifying the sources of their stress, advisers were asked to detail how they’re managing this stress. Confirming last year’s survey findings, FlexShares again found that advisers who change their work habits, such as time management, delegation, and enhancing client relationships, are more likely to reduce stress than those who rely on methods outside of work, like meditation, exercise, or leisure activities. Those who used outside of work strategies were 19 per cent more stressed than advisers who implemented on-the-job changes. This shows that the best way for advisers to handle the stresses of the job is to tackle them head on.

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