Advisory firms, take heed—just four out of 10 advisors are actually satisfied with the firms they’re currently with. And considering that not only are half of existing advisors expected to retire in the next 14 years but there are fewer graduates entering the financial services industry, this could be a problem.
That’s according to research from Fidelity, which says that firms should work on advisor engagement to help them retain talent—especially since while 60 percent of advisors are satisfied with their career, only 40 percent are happy with their firms.
The study highlighted the sometimes substantial differences between firms with highly satisfied advisors and those whose advisors aren’t so happy, pointing out that 90 percent of highly satisfied advisors “feel inspired at work” compared with just 53 percent who aren’t so satisfied, and 87 percent of highly satisfied advisors believe that at work their opinions count, compared with only 55 percent of less content advisors.
In addition, 73 percent of highly satisfied advisors say that someone at work encourages their development, compared to just 51 percent of other advisors, and 87 percent say that the mission or purpose of their firm makes them feel that their job is important, compared to just 63 percent of the less-satisfied crowd.
The report cites Gallup findings that “engaged teams have less turnover, greater profitability and higher productivity,” while Fidelity’s research identified “opportunities for firm leaders to increase engagement, particularly around helping advisors with their career development and growth.”
Only 55 percent of survey respondents, for instance, said that someone at work had talked to them about their progress in the previous six months, and even fewer—just 51 percent—said they understand what they need to do to get promoted to the next level.
“In this increasingly competitive talent market, it’s important that advisors have a strong sense of community and purpose at their firms, as well as clearly defined growth paths and meaningful roles that allow them to deliver real value to their clients,” Charlie Phelan, vice president, Practice Management & Consulting for Fidelity Clearing & Custody Solutions, is quoted saying. He adds, “The firms successfully retaining advisors are building engaged, connected teams, and also offering things like digital tools that help advisors work more efficiently.”
Phelan points out that “Firm leaders that are successfully retaining advisors are focused on what I call the ‘ABCs of engagement.’ They’re a) asking for opinions and feedback, so that advisors feel connected to the firm culture; b) building programs that help meet advisor needs and help them develop; and c) communicating clearly around everything, from the firm’s mission to what it takes to be successful there.”
And considering the challenges presented in recruiting new advisors, retention will become an even bigger issue. Currently, 59 percent of advisors in the Fidelity survey say finding talent and staff that fit their needs is a challenge for their firms.
In addition, although 55 percent think their firm spends considerable time and resources on recruiting new talent and staff, only 37 percent believe their firms have been effective with their recruiting efforts to date.