Many advisors not spending enough time with clients, survey finds

Nearly one-third of advisors say they do not have enough time to spend with clients, possibly affecting their ability to build deeper client relationships and negatively impacting advisor retention, according to a recent J.D. Power survey.

Advisors with not enough time to devote to their clients spend an average of 41% more time each month than their peers on non-value-added tasks, such as compliance and administrative duties, according to the U.S. Financial Advisor Satisfaction Study.

And with the average age of U.S. financial advisors being 56, 20% of advisors indicated that they are five years or fewer away from retirement.

In addition, 30% of employee advisors and 28% of independent advisors said that they “probably will” be working for their current firm in the next one to two years, as opposed to saying that they “definitely will.” This suggests, the survey pointed out, that even if advisors are not contemplating leaving the industry or their firm, many may become apathetic about their situation.

The majority of advisors also said that they are either in the office full time or most of the time (40% and 33% respectively) as opposed to majority or all remote, said Craig Martin, executive managing director, global head of wealth and lending intelligence at J.D. Power.

“The advisors that are still spending the bulk of their time remote are much less satisfied than those in the office,” he said.

Also, when advisors were asked if they have an appropriate work / life balance, female advisors were much less likely than male counterparts to indicate they have a good work / life balance. For both genders, satisfaction is lower by at least 100 points, with a slightly larger difference for males.

Demands keep advisors away from clients

So, what is keeping advisors away from their clients?

They have various demands on their time beyond client interactions, Martin explained. These include performing general administrative duties, training, compliance and the like. These are either an element of their job as an employee of an organization, or a necessity of running the business.

“All advisors spend some of their time on other activities,” added Martin, “but a key factor that impacts satisfaction, loyalty and intentions to stay is whether the time and effort required become arduous and a barrier to success.”

The impact of advisors’ lack of time

Advisors’ inability to spend enough time with their clients may be affecting their success. Martin said that the company found that over 40% of all consumers report that they are receiving an experience that is ‘transactional’ when working with an advisor.

“This experience results in a dramatically lower satisfaction and loyalty when compared with more ‘comprehensive’ advice,” Martin said.

A critical factor in delivering comprehensive advice is having adequate time to spend with clients to truly understand their goals and needs in a way that establishes a level of trust that creates true loyalty, Martin stressed.

“Over time, failing to create these high-quality relationships puts the business at risk because clients will question the value of the service they are paying for and will consider alternative options that provide a better cost / benefit,” he said. Also, he added, “the more barriers a firm creates to an advisor spending time with their clients through sub-par support, training, technology and the like, the greater the risk of advisor attrition,” he added.

Enabling advisors to spend more time with clients

So, what can the industry do to help advisors spend more time with their clients? A key place to start is to have an objective perspective of what is reasonable in terms of the time and effort advisors should be spending on different activities, Martin said.

Things like compliance and training are always going to be a part of the job but it’s critical to understand if the effort required goes well beyond that of peers. The firms that can optimize these activities by streamlining processes, making support easy to reach and effective and avoiding unnecessary structural impediments will see the payoff in both more productive and loyal advisors and happier customers,” he said.

Overall satisfaction of advisors by firms

The survey also ranked overall satisfaction by firms. Among employee advisors, Stifel ranks the highest in overall satisfaction with a score of 777. Raymond James & Associates (711) ranks second and Edward Jones (672) ranks third.

And among independent advisors, Commonwealth ranks the highest in overall satisfaction with a score of 798. Raymond James Financial Services (697) ranks second, while Ameriprise (664) and Cambridge (664) rank third in a tie.

The U.S. Financial Advisor Satisfaction Study, which was redesigned for 2023, measures satisfaction among employee advisors (those who are employed by an investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently) based on six key factors (in alphabetical order): compensation; firm leadership and culture; operational support; products and marketing; professional development; and technology.

The study is based on responses from 4,183 employee and independent financial advisors and was fielded from December 2022 through April 2023.

 

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

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