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Advisors and brokers working in teams made 32% more in compensation than those going it alone, according to the new Broker and Advisor Sentiment Index study from Fidelity Investments.

Clients of teamed advisors also tended to have larger average accounts ($2.88 million versus $1.16 million), the report found.


The survey, conducted in March, tracked overall professional satisfaction of 1,200 U. S. brokers and advisors, and provided data on assets under management, compensation structure and amounts, demographic makeup, and other issues.

In general, sentiment was at its highest level since the financial crisis -- not surprising, given the recent jumps both in broader stock market performance and, more specifically, in assets under management.

Advisor sentiment was also at its second-highest level since the survey began in 2005.


For the 13% of brokers and advisors who are teamed up on a full-time basis (another 37% say they partner on an intermittent and informal basis, while 50% go it alone all the time), the survey suggests that a few factors might be in play. Teamed advisors were more likely to be active networkers, Fidelity found, and more proactive at making business changes -- such as asking less profitable clients to leave.

In addition, teams allow advisors to specialize in the tasks they do best, distributing roles like prospecting for new business, managing investment strategy, and developing and tracking client financial plans, suggests Alexandra Taussig, senior vice president of marketing for Fidelity's National Financial Services: "It's hard to have one person do all three of those equally well."


Other key findings from the survey:

  • The shift to fee-based compensation pays off: Since the 2007 survey, advisors have told Fidelity they wanted to shift toward more fee-based planning.  The payoff: Fee-based planners had 31% higher AUM than their commission-based peers, 44% higher compensation as well as higher sentiment. (Translation: They were happier and made more money.)
  • Advisors are going through a demographic shakeup: The average age of brokers and advisors dropped over the last two years to 46 from 48. The combined segment of Gen X and Gen Y had higher AUM than their older peers: $59 million versus $51 million. Women are also entering the field rapidly -- the number with five or fewer years of experience jumped 40% in the last two years -- and have higher AUM than their male peers, the survey found.


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