FAs under 40 want a digital culture in their firms says JD Power

Younger advisors have new demands that the industry must meet

FAs under 40 want a digital culture in their firms says JD Power

Financial advisory firms will struggle to attract and retain talent unless they can meet the demands of the ‘digital-native’ generation.

That’s the warning from a new report from J.D. Power which says that the younger cohort entering the industry are less satisfied with the technology support available to them from their firms compared to their older colleagues.

It follows a recent CapGemini report which said financial services firms are falling behind in technology transformation.

"The 9-to-5, office-based culture, with its coffee for closers and gong-ringing ceremonies to celebrate new sales is gone," said Mike Foy, Senior Director of the Wealth and Lending Intelligence at J.D. Power. "In its place, the new generation of mobile financial advisors is interacting with clients and prospects via a range of digital channels including social media, text, chat and video.”

FAs under 40 say that they are not aware of or don’t use smartphone-friendly tools (26%) or do not use tablet-friendly tools (49%). For those that don’t use tools provided by their firms, a lack of integration with other tools is a key issue.

The study found that the average age of financial advisors in the US is about 55, and approximately one-fifth of advisors are 65 or older.

Missed opportunities
Social media is a source of frustration for younger advisors with 42% saying that their firms ban its use for communicating with clients and prospects. That clashes with the 64% who have used social media for this purpose who say it has helped them strengthen client relationships and the 47% who say it has helped them win new business.

“Wealth management firms that embrace these technologies and train and empower advisors to use them effectively will ultimately win the war for talent, but very few are delivering the solutions that younger advisors demand,” added Foy.

Among employee advisors under 40 who are highly satisfied with their firm's technology 82% say they "definitely will" remain with their firm and 76% say they "definitely will" recommend their firm to other advisors.  Among those dissatisfied with technology, just 33% say they "definitely will" remain and 29% "definitely will" recommend.

The J.D. Power 2019 U.S. Financial Advisor Satisfaction Study is based on responses from 3,571 employee and independent financial advisors and was fielded from January through May 2019.