More than a third of advisors are considering switching firms, says JD Power

investmentnews.com:

It looks like loyalty is dead in the wealth advisory space, as a significant portion of financial advisors in the US are contemplating a change in their employment, according to the JD Power 2024 US Financial Advisor Satisfaction Study.

According to the survey, which took responses from 4,072 employee and independent financial advisors from January through May 2024, 34 percent of employee advisors and 41 percent of independent advisors who are more than two years from retirement may leave their current firms within the next one to two years.

A significant chunk of advisors aren’t first-time defectors either, as 28 percent of employee advisors and 52 percent of independent advisors have already worked for three or more firms during their careers.

Craig Martin, executive managing director and head of wealth and lending intelligence at JD Power, sees several crosscurrents at work to tempt even the most loyal advisors to switch teams.

“Aggressive compensation offers, a promise of better technology or support and flexible business models can all tempt advisors to change firms,” Martin said in a statement. “However, the cultural fit and advisor confidence in leadership are what determine how susceptible they are to attempts to lure them away.”

The survey found increased satisfaction among employee advisors, who are seeing significant improvements in compensation-related metrics, perceptions of technology, and quality of support at their employer firms. Meanwhile, independent advisors are growing increasingly disenchanted due to leadership-related issues, with fewer advisors strongly agreeing that their firm is headed in the right direction—dropping from 54 percent in the 2023 edition of the study to 46 percent in 2024.

Satisfa