Change is coming to the field of financial advice, and it’sgoing to be disruptive.

That’s according to the "J.D. Power 2016 U.S. Financial AdvisorSatisfaction Study," which found that traditional investmentadvisory services are likely to be transmogrified in a confluenceof retiring advisors, the rise of the robo-advisor or automatedinvestment-picking algorithm, and the lower fees of independentadvisory shops.

The study measures advisor satisfaction — both for employees andindependents — and uses seven factors to determine how content (orotherwise) advisors are. The factors are client support;compensation; firm leadership; operational support; problemresolution; professional development support; and technologysupport.

Satisfaction is measured on a 1,000-point scale. Among employeeadvisors — those who work for an investment services firm — overallsatisfaction averages 722; that’s up 21 points from 701 in2015.

Among independents — those affiliated with a broker-dealer butoperating independently — satisfaction averages 755; that’s down 18points from last year’s average of 773.

Retirement and going independent are main factors

The study pointed to several impending changes that will havefar-reaching changes for the field. First is the potential forretirement among advisors on a large scale.

Nearly a third (31 percent) are poised to retire in the next 10years. Between 2014 and 2016, the number of advisors indicatingthey plan to retire in the next 1–2 years has risen to 3 percentfrom 2 percent.

Then there’s the trend for advisors to jump ship, or to strikeout as independents.

The percentage of employee advisors, in particular, who indicatethat they’re likely to go independent in the next 1–2 years hasdoubled since 2014, when it was 6 percent. Now it’s 12 percent. Andanother 12 percent of advisors say they’re likely to join or startan independent registered investment advisor practice in the next1–2 years, up from 7 percent.

Retain advisors, retain profits

Between retirements and other departures, firms could stand tolose billions, according to the study.

At the current expected rate of attrition due to retirement andfirm switching, it said, a firm with 10,000 financial advisorscould have more than half a billion (approximately $585 million) inannual revenue at risk during the next 1–2 years. That emphasizeshow critical it can be to retain top producers and to effectivelymanage succession planning to transition assets to neweradvisors.

Keeping advisors happy could be the key; the study found thatamong employee advisors who are highly satisfied (overallsatisfaction scores of 900 and above), only 1 percent say they“definitely will” or “probably will” leave their firm in the next1–2 years, compared with 46 percent of dissatisfied employeeadvisors (scores of 600 and below) who say the same. The same trendholds true for independent advisors (2 percent and 45 percent,respectively).