The J.D. Power 2017 Advisor Satisfaction Study contains a counterintuitive finding: There's an inverse correlation between top advisers and their overall satisfaction:
"Higher producers are the least satisfied employees," according to the report. "Among advisors with more than $1 million in annual production, overall satisfaction is 683 [on a 1,000-point scale], down 27 points from 2016. In contrast, among advisors with less than $250,000 in production, overall satisfaction increases to 799 from 764 in 2016."
Wouldn't you expect the exact opposite?
The reality is that top-performing advisers are entrepreneurial and enterprising — they need independence to thrive. And when they feel constrained, job satisfaction declines.
Here are the constraints that can significantly impact an advisor's sense of independence:
Support infrastructure. Tier One firms, deploying for 20,000+ employee advisers, typically provide a huge, sprawling support infrastructure. These systems deliver useful resources that automate routine operations and help advisers work smarter. But redundancies, standardization and inflexible legacy platforms can create a bureaucratic maze that unnecessarily burdens them at the same time.
Lower-tier broker-dealers tend to provide more limited support. A leaner support infrastructure, in principle, means maximum independence and flexibility for enterprising and ambitious advisers. Yet it can also mean more manual workflows, which restrains advisers as they struggle to keep up with day-to-day administrative tasks.
In short, enterprising advisers are either not equipped with the tools they need to succeed — or the systems designed to provide support merely get in the way. In either case, a sense of independence is diminished.
Compliance. New regulations constrain autonomy in the same way. Not too long ago, advisers could work directly with clients in more intimate, one-on-one relationships. Advice was based on gut instinct and long-term client familiarity. Adviser-investor relationships were fluid, relaxed and collegial. All of that can still play true today, but now there's an ever-present mediating force: regulatory scrutiny.
Advisers are under pressure to document and track everything: Communications must be carefully crafted, performance reporting is cumbersome, and onboarding processes are complicated and involve what feels like endless paperwork. Advisers across the industry, consequently, feel that their independence is slipping away.
Digitalization of the wealth industry. In general, the most productive advisers tend to be the most seasoned advisers. And their way of doing business typically doesn't involve a high-tech, omni-channel, Amazon-shopping-cart model of wealth management.
Successful advisers don't want to change their business model. They don't want to "transform." Why change what works? As with support infrastructure and regulations, new technology often feels like something that just gets in the way and makes life more difficult.
Here's a better approach that I believe puts the focus back on adviser independence:
1. Minimize workflow inefficiencies from legacy systems. Any approach should emphasize deep integration and consolidation, so workflows can coalesce into one unified solution. Leading broker-dealers are finding that comprehensive workstations or dashboards can improve the adviser experience immensely. With everything in one place, advisers can more quickly and efficiently access important information, execute day-to-day administrative tasks and communicate with clients.
2. Facilitate easier data access. We're all drowning in data. But even though it's everywhere, it's still — paradoxically — hard to find, process, synthesize and access. It seems as if the more data advisers have, the less data they can actually use. Industry leaders have developed impressive technologies to assist with data aggregation and data visualization. Such tools can facilitate greater transparency, increased compliance, new insight into market opportunity and better overall client advice.
3. Augment client engagement. Augmentation is the key word. Digital strategies and solutions shouldn't disintermediate the investor-adviser relationship. Technologies that are employed to facilitate client engagement should serve to build on and enhance existing relationships. Digital channels can improve collaboration and help advisers attract new money (especially from millennials). The focus should be on making sure digital technologies augment rather than supplant traditional interactions.
The last few years have been all about compliance and the client experience. But in the wake of change, adviser satisfaction is waning. It's time to unleash the adviser.
Donna Bristow is managing director for North American wealth at Broadridge Financial Solutions Inc.