Burnout high among planners, especially for female financial advisors

Financial planners burn out at a high rate from long work hours on a job that spills over into their personal and family time, according to a new study.

Women report that they're going through stress in the workplace from the challenges of working at large firms, according to a study on work-life balance in the planning profession. In particular, they cited the negative effects of time spent working with clients or at their desks on the amount with loved ones. Researchers Aman Sunder and Rebecca Henderson of Kaplan's College for Financial Planning, as well as Jennifer Lehman of the American College of Financial Services, examined burnout in the profession as part of the study published in June in the CFP Board Center for Financial Planning's Financial Planning Review.

More financial advisors are focusing on their own self-care and rethinking their office layouts as a means of boosting productivity and guiding clients through economic tumult and the stress that's often connected to money. The researchers conducted an online survey of 287 respondents in mid-2019 after reaching out to more than 11,000 alumni and current students of planning certification programs, across 100 planning firms of all sizes. Their findings suggest that planners get stressed out by their jobs less frequently than comparable professionals in fields such as insurance but often struggle with work-life balance. That's especially true for female planners.  

"This research and a previous paper with different data have consistently shown that larger firms are unable to provide work-satisfaction or work-life balance satisfaction to their equally or more talented female advisors," Sunder, the Kaplan school's program chair, said in an email. "Women trade success for higher satisfaction by working in smaller firms."

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Sunder was referring to the success in terms of the pay, corporate resources and professional development available to advisors who remain with larger firms for long tenures. Men in the survey reported lower rates of satisfaction with their work-life balance than did women at smaller firms, which the researchers defined as solo shops or small ensemble teams. For men and women, though, the smaller size came with closer connections to clients, the planners said. In addition, CFP certification and marriage also displayed a correlation with job satisfaction.

"While the financial planning profession provides some work-life balance opportunities compared to similar professions, the level of burnout is high for both men and women," according to the study's conclusion. "Things like firm size and home-to-job spillover negatively affect women more than men. Financial planning has provided great careers for many, especially those with CFP credentials, and can do even better."

Sunder said the study represents one aspect of academics' ongoing research into diversity in the profession, where women still represent fewer than a quarter of CFPs and less than 5% of planners are Black or Hispanic. The study recommends that wealth managers take more steps to usher women into the profession, encourage them to get their CFPs and promote them to client-facing and leadership roles.

Many advisors and other experts who spoke with Financial Planning are thinking about how to alter the industry's demographics and avoid burnout at the same time. For starters, male advisors earned 53% higher median pay than female ones in 2021, according to U.S. Bureau of Labor Statistics data. That disparity is "just step one" for wealth managers to retain female advisors, said Shauna Mace, the head of practice management for SEI's advisor business. She noted that other industries show similar dynamics, with many women choosing to start their own businesses rather than stay at the same firm.

Most conversations about work-life balance among planners of any gender revolve around compensation, according to Mace. Other talking points relate to the flexibility of the job, with remote work being an expectation after the pandemic, and other options such as a four-day work week or non-traditional hours. Such discussions need to take place "early and often" with input from employees as well, she said. Advisors must first figure out their own goals for their practices in order to keep burnout at bay for the long term.

"There's this continuous back and forth between capacity and needing to grow and not having enough capacity," Mace said. "There are lots of different models out there that support different visions. In the coaching work that we do, we start with clarity: What do you want? Being able to answer that question can cause a lot of anxiety and discomfort for advisors."

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Wealth managers on the recruiting trail are developing answers to appeal to prospective advisors who ask them about their firms' work-life balance. At the Independent Advisor Alliance, the Charlotte, North Carolina-based firm offers flexible scheduling and the option to work from home two days a week to its staff of 27 employees, founder Robert Russo said in an email. 

"Doing this has increased productivity and feelings of accomplishment for the whole team and forces us to be efficient with our meetings on in-office days," he said. "You hear people cite a potential decline in employee engagement or client service as a reason not to implement these things, but with fewer sick days and unplanned absences taken, I've found the opposite is true. Happy employees who feel valued results in happy clients who receive value."

Still, for many advisors, the quest to stay away from burnout plays out on a daily basis regardless of whether they own their firms or work at a smaller scale. In response to a social media post by FP asking for advisors' best methods of preventing burnout, Andrew Komarow of Farmington, Connecticut-based Planning Across the Spectrum said that reducing the stress seems more viable than eliminating it outright.

"Is avoiding burnout possible, or is it coping with and navigation of when you start to feel burned out, so you can recover faster?" he said.