Commonwealth Financial Network ranked highest in employee satisfaction among independent advisers, according to a J.D. Power and Associates survey released today.
Commonwealth scored 898 on a 1,000-point scale (for more details on Commonwealth's score,
click here.)
Commonwealth was followed by Cambridge Investment Research Advisors, which scored 848 points (
here's more on Cambridge's rating) . Raymond James Financial Services Inc. came in third with a score of 845.
This is the first time that J.D. Power has ranked independent broker-dealers. Two previous studies, published in 2007 and 2008, focused on wirehouses and regional firms.
“This is a very important element in the industry and needs to be examined separately because there are differences between the experience of an independent adviser and one that is employed by the firm,” said David Lo, director of investment services at J.D. Power.
MetLife Broker Dealer Group ranked last among independent advisers, scoring 648 points. But MetLife executives were excited to see that the firm was ranked for the first time by J.D. Power, said spokeswoman Jessica Ongg.
“We see this as an opportunity to improve in our rankings,” she said.
(To see a chart showing
how all the independent firms in the survey fared,
click here)
Edward Jones ranked highest in employee adviser satisfaction at broker-dealers, scoring 876 points (
Click here for more on the firm's score). Jones beat out Raymond James & Associates Inc., which tied with Edward Jones for first place in 2008. (
Click for more details about RJ's rating.)
Morgan Stanley Smith Barney LLC had the lowest satisfaction score among employee advisers, followed by Wells Fargo Advisors, a unit of San Francisco-based Wells Fargo & Co.
(
To see how the big six B-Ds stacked up, click here.)
Morgan Stanley was critical of the survey.
“The validity of this poll is highly questionable, given the fact that it’s a sample of only 134 financial advisers [from Morgan Stanley] and there is no confirmation or validation that these people are employed by the firm,” said company spokeswoman Christine Pollak.
J.D. Power does verify where people work when they are surveyed and as for the sample size, the firm’s minimum threshold is 100, said Mr. Lo.
“From a sampling standpoint, 134 is enough to have,” he said.
Wells Fargo Advisors is encouraged by the survey results, which showed that independent and employee advisers’ perception of stability have improved, said Rachelle Rowe, a spokeswoman for the firm. (Wells Fargo Advisors Financial Network ranked sixth among independent broker-dealers.)
“However, we aspire to improve. Our employee and independent [advisers] are important to us, and we’re working hard to improve,” Ms. Rowe said.
“Our firm and the industry have been through a lot over the last few years, but we believe that most of our independent and employee [advisers] — as well as our clients — recognize the advantages of being affiliated with a company as respected and admired as Wells Fargo,” she said.
The 2010 U.S. Financial Advisor Satisfaction Study is based on responses from 2863 financial advisors who hold a Series 7 license. Survey sample and industry weighting was provided by Qualified Media and
InvestmentNews. The study was conducted in February and March 2010 and between July and September 2010.
The survey covers key areas of adviser satisfaction including compensation, firm performance, technology and work environment.
Overall, advisers at wirehouses are less satisfied with their employers than advisers at regional and independent firms, according to the survey. For example wirehouses received a 3.85 score out of 7 on the criterion, “cares more about the customer,” down from 5 in 2007. Similarly, wirehouses received a 5.36 for financial security, down from 6.78 in 2007. Advisers gave wirehouses a 4.71 for reputation, down from 5.89 in 2007.
Non-wirehouses, conversely, saw their brand image become more positive or stay level among advisers in every category.
On financial security, the non-wirehouses scored 6.47, slightly up from 6.45 in 2008. On the question of “cares more about the customer,” non-wirehouses scored 5.44, up from 4.82 in 2008. On reputation, they scored 6.20, up from 6 in 2008.
“A lot of the wirehouses brands have been hammered in the press and some wirehouse advisers are saying, ‘I have had to defend the brand much more than I have in the past,'” Mr. Lo said. “Wirehouses have always been the bedrock of financial stability, pre-2008, but now it seems that it is the non-wirehouses that are carrying that out.”
