J.D. Power & Associates says that the overall level of satisfaction among both employee and independent advisors “remains relatively high,” according to its 2014 survey. However, large numbers of reps do not understand their compensation, and many also feel that the latest comp packages are unfavorable to them.
“Being paid competitively is important, but elements related to issues like clarity and consistency are also significant,” explained Michael Foy, director of J.D. Power & Associates’ wealth management practice in New York, in an interview. “A substantial number of advisors say they do not fully understand their compensation packages – 40%. Clearly that is a problem across both channels.”
The latest satisfaction study reflects the views of more than 3,900 advisors. It was redesigned from the prior year, with responses collected between January and April.
“There were a number of changes in compensation, particularly on the employee-advisor side,” Foy said. “About half of these advisors said their plans changed in the past year, with four out of 10 saying the changes were negative.”
In the independent channel, only about a third of reps experienced compensation changes, with about one in four having negative views of the new comp plans.
Despite these compensation issues, overall satisfaction among employee advisors increased to 721 (on a 1,000-point scale) from 695 a year ago, and satisfaction among independent advisors fell to 778 from 794.
Also, 87% of employee reps and 93% of independent advisors say they “definitely will” or “probably will” remain at their current firm for the next one or two years, the survey finds.