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Study finds US advisers are an ageing population


The US Financial Advisor Satisfaction Study from J.D. Power reveals that the US wealth management industry is facing a generational crisis.

The study found that the average age of financial advisers is about 55, and approximately one-fifth of advisers are 65 or older. As these advisers move into retirement, tomorrow’s leading firms will be those that effectively attract, develop and retain new advisor talent, the study says.
Advisers under the age of 40 account for only 11 per cent of the financial adviser population, and the support they want to help them develop a successful practice looks very different from that of the previous generation. According to the study the first generation of financial adviser ‘digital natives’ expects technology to play a more important role in that support, and they are much less satisfied than older advisers with the technology support they currently get from their brokerage firm.
“The 9-to-5, office-based culture, with its coffee for closers and gong-ringing ceremonies to celebrate new sales is gone,” says Mike Foy (pictured), Senior Director of the Wealth and Lending Intelligence at J.D. Power. “In its place, the new generation of mobile financial advisers is interacting with clients and prospects via a range of digital channels including social media, text, chat and video. Wealth management firms that embrace these technologies and train and empower advisers to use them effectively will ultimately win the war for talent, but very few are delivering the solutions that younger advisers demand.
“When it comes to technology, younger advisers score their firm low on reliability, relevance and responsiveness of support,“ Foy says. “This group has high expectations and firms will need to raise the bar to meet them going forward.”
Key findings from the 2019 study include the fact that about one-fourth (26 per cent) of employee financial advisers under 40 either aren’t aware of or don’t use smartphone-friendly tools, and 49 per cent don’t use tablet-friendly tools. Among those who don’t use firm-provided mobile tools, younger financial advisers are more than twice as likely to cite a lack of integration with other tools as a reason.

Another finding is that while social media drives business, many advisers still can’t take advantage of it. Social media use by advisers continues to be a sticking point for the industry, with 42 per cent of employee advisers under age 40 reporting that their firm does not allow them to use social media to communicate with clients or prospects, despite the fact that 64 per cent of advisers in that age group who have used social media say that it has helped them strengthen client relationships and 47 per cent say it has directly helped them win new business.
High-functioning tech drives adviser loyalty and advocacy was another finding.  Among employee advisers under 40 who are highly satisfied with their firm’s technology (900+ satisfaction score on a 1,000-point basis), 82 per cent say they ‘definitely will’ remain with their firm and 76 per cent say they ‘definitely will’ recommend their firm to other advisers.  Among those dissatisfied with technology (<800 satisfaction), just 33 per cent say they ‘definitely will’ remain and 29 per cent ‘definitely will’ recommend.

The rankings of US employee advisers found that Edward Jones ranks highest in overall satisfaction with a score of 926. Raymond James & Associates (864) ranks second and Stifel, Nicolaus & Company (848) ranks third.
Among independent advisers, Commonwealth Financial ranks highest in overall satisfaction with a score of 960. Cambridge (873) ranks second and Raymond James Financial Services (869) ranks third.
The study measures satisfaction among both employee advisers (those who are employed by an investment services firm) and independent advisers (those who are affiliated with a broker-dealer but operate independently) based on seven key factors (in alphabetical order): client support; compensation; firm leadership; operational support; problem resolution; professional development; and technology support.
The study is based on responses from 3,571 employee and independent financial advisers and was fielded from January through May 2019.

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