Are firms falling behind on advisor engagement?

As the advisor workforce ages and new blood gets tougher to come by, keeping employees satisfied is key

Are firms falling behind on advisor engagement?

The financial-services industry faces a crucial continuity challenge. More and more career professionals are aging out of the business without capable people to pass their books to; on the recruitment end, infusing fresh blood into any given firm is getting tougher as fewer graduates explore the opportunity in the field.

The talent pipeline problem becomes even more severe when one considers the risk from leakage, as shown by new research from Fidelity Clearing & Custody Solutions in the US. It uncovered a significant opportunity to improve advisor satisfaction: while six in 10 advisors that participated in the study were satisfied with their careers, just four in 10 said they were satisfied with their current firms.

“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,” said Charlie Phelan, vice president, Practice Management & Consulting for Fidelity Clearing & Custody Solutions.

The survey builds on the concept of employee engagement championed by US-based analytics and advisory company Gallup. Under that framework, engaged employees are defined as those who are involved in, enthusiastic about, and committed to their work and workplace. That leads to engaged teams, which have less turnover, greater profitability, and higher productivity.

Among the advisors surveyed, just 55% said that someone at work had talked to them about their progress in the previous six months. Similarly, just over half of all advisors (51%) said they understand what they need to do to get promoted to the next level.

The survey also showed how firms with highly satisfied employees engage advisors more effectively than advisory firms in general. This was reflected in statements like:

  • There is someone at work who encourages my development (51% of advisors vs. 73% of those at high-satisfaction firms);
  • The mission/purpose of my firm makes me feel that my job is important (63% vs. 87%);
  • In the last year, I have had opportunities to learn and grow at work (77% vs. 93%);
  • I let my junior advisors and staff know what they need to do to get promoted to the next level at my firm (41% vs. 60%);
  • My supervisor, or someone else at work, seems to care about me as a person (59% vs. 75%); and
  • At work, my opinions seem to count (55% vs. 87%)

Additional statistics on firms’ recruitment efforts and experiences underscore the importance of engagement. Among all the advisors in the Fidelity survey, 59% reported feeling like finding talent and staff that fits their firm’s needs is a challenge. Just over half (55%) think their firm spends considerable time and resources on recruiting new talent and staff, and just over a third (37%) believe their firms’ recruiting efforts to date have been effective.

“The firms successfully retaining advisors are building engaged, connected teams, and also offering things like digital tools that help advisors work more efficiently,” Phelan said.


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