Brokers generally like their jobs, but seem to have channel-envy. At least that’s what Fidelity unit National Financial found in its survey of brokers conducted this summer.
The survey found that overall career satisfaction among brokers, as measured by the National Financial Broker Sentiment Index, rose to 7.7 in 2006 from 7.5 in 2005. The study calculates the index based on interviews with 1,017 U.S. brokers from a random sample of regional, bank, insurance, independent and wirehouse firms. The brokers surveyed have, on average, worked in the industry for 15 years and manage between $25 million and $49 million in assets.
Yet, despite that high level of overall satisfaction, 60 percent of surveyed brokers said they would choose another channel to practice in if they were to leave their current firm. Further, 33 percent of all brokers surveyed say they would choose the independent broker/dealer route, and 18 percent would prefer to go totally independent with a registered investment advisor firm. While 22 percent of brokers surveyed currently work at wirehouse firms, only 11 percent of brokers surveyed would choose a wirehouse firm. Still, wirehouse brokers said they are less likely to switch than other channels.
Sandy Metraux, executive vice president of National Financial, says, “We don’t see much switching actually going on, but advisors are attracted to what they see as more independence, more choice and better compensation.”
The survey found that brokers at regional firms are the most satisfied of the bunch, ranking their satisfaction level at 8.0, while bank brokers had the lowest overall satisfaction at 7.2. Compensation and professional development were the factors National Financial found to be most important to broker satisfaction. More than half of the respondents—58 percent—say they are very satisfied with their compensation plan, up from 53 percent in 2005. But, 23 percent say they would like to be paid solely on asset-based fees, versus just 5 percent who currently are paid this way.
Brokers also placed more value on professional development this year: 56 percent versus last year’s 42 percent of respondents. Specifically, continuing education, advanced industry knowledge and advanced selling skills were developments that brokers’ said they value most.
Two other key factors influencing broker satisfaction, according to the survey, were the success of the broker’s current firm (75 percent very satisfied) and the overall morale among brokers in a firm (73 percent very satisfied).
Jodie Papike, vice president of Jamul, Calif.-based Cross-Search, a recruiting firm that helps match advisors with independent b/ds, attributes the high rate of satisfaction overall this year, in part, to heated recruiting competition in the industry. Independent b/ds in particular, she says, are trying harder to keep reps happy. “The independent b/ds know how much competition is out there for good advisors. They have to be really careful because independent reps can jump ship very easily since there are no golden handcuffs involved. All they have to do is find another independent firm,” she says.