Independent advisors overwhelmingly approved of Commonwealth Financial Network’s leadership and direction, pushing the independent broker-dealer to the top of J.D. Power and Associates’ 2012 U.S. Financial Advisor Satisfaction Study.
Commonwealth scored a 917 overall out of a possible 1,000 among independent advisors, securing the top slot for the second consecutive year. It bested Raymond James Financial Services, in second place with 887 points, and Northwestern Mutual Investment Services, which came in third among independents, with 831 points.
J.D. Power measured the satisfaction of both independent advisors and employee advisors. The survey asked advisors to rank their broker-dealers in nine categories, including leadership, compensation, work environment, technology, and advisor services and support.
In the employee advisor segment, Edward Jones took the top slot with 901 points. Raymond James & Associates placed second with 864 points from employee advisors.
“Our firm is client-first and we’ve never wavered from that,” says Wayne Bloom, CEO of Commonwealth Financial Network. “It starts with providing indispensable service for advisors and an environment for our 500-plus employees that is nurturing. When you have a motivated staff and you treat them well, they can provide indispensable service to their clients.”
Overall, firm performance continued to be the most important factor driving advisor satisfaction in both the employee and independent segments, according to J.D. Power. “Advisors want to know ‘Are their priorities aligned with mine? Am I affiliated with a market leader that will be around for a long time?’” says David Lo, director of investment services at J.D. Power and Associates.
Commonwealth Financial Network took first place largely because it has a long history of putting advisors’ needs front and center, says Lo. According to independent advisors affiliated with Commonwealth, the firm provides excellent support tools and services for both client-facing and back office operations. The firm also gives independent advisors a polished and professional platform that impresses their clients, says Lo.
“When I’m out there at different [independent] firms, no one questions [Commonwealth’s] leadership,” Lo says. Appearances really do matter, he adds. When independent broker-dealers introduce Web tools to independent advisors, for instance, advisors want to know whether those tools look sleek and professional, he says.
Commonwealth Financial’s CEO Bloom explains that the firm invested $15 million in new portfolio accounting and performance reporting software for its integrated web-based platform, Client360°.
Raymond James managed to straddle both the independent and employee channels, and placed second in both, showing improvement among independents compared with last year. The firm was second last year in the employee advisor segment and third in the independent sector.
“We’re really pleased with where we are in the standings. We have a really engaged broker application support team,” says Tim Killgoar, director of client experience at Raymond James Financial. “It helps keep them up to speed. We also have a pretty robust technology advisory council, where in advisors give feedback and we work that back into the services.”
Edward Jones Investments is focused on helping individual investors shape and attain financial goals, says managing partner Jim Weddle. That approach helped it snatch the top ranking away from such industry titans as Merrill Lynch, Morgan Stanley Smith Barney and Wells Fargo Advisors, all of which scored below the industry average of 698 points.
Edward Jones does not sell or manage proprietary products, nor does it go after institutional business, according to Weddle.
“We have a singular focus on doing one thing well — meeting the long-term needs of investors,” Weddle says, adding it was heartening to see that the firm’s compliance support was ranked highly.
“We really put a huge investment in the creation of tools to put at our financial advisors’ fingertips. These tools allow them to collect information from clients to analyze the present situation,” he says.
Donna Mitchell writes for Financial Planning.