Both employee and independent advisors have grown less satisfied with their jobs over the past year amid concerns about the fiduciary rule, pay and leadership.

Perennial winners Commonwealth Financial Network and Edward Jones topped their respective channels in J.D. Power’s annual advisor satisfaction study, which the company released this week. Overall satisfaction ticked down across the industry, though, led by steep drops among top-producing advisors.

J.D. Power adviser satisfaction

The rule has forced costly changes at firms, with advisors wondering whether President Trump’s administration will rescind it. Meanwhile, three of the four wirehouses have pulled back from their recruiting efforts, which has roiled the traditional pay packages aimed at attracting advisors.

Frustrations around the rule, compensation and firms’ leadership led to the falling ratings, according to the consulting firm’s study. Some 57% of employee advisors said they do not strongly agree with the approach taken by their leaders and do not strongly agree that their supervisor is helpful and available.

The industry faces “an unprecedented degree of disruption as key trends in technology, regulation and demographics increasingly change not only the client experience, but also that of the financial advisor,” J.D. Power wealth management director Mike Foy wrote in a message included in the report.

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PRODUCTIVITY DOESN’T BREED HAPPINESS
Independent advisors gave their broker-dealer firms a rating of 752 on a 1,000-point scale, which is a three-point dip from last year and at least the third straight year of lower marks. Employee advisors rated their jobs at 719, which was also down three points from 2016. The figure rose 21 points last year.

Satisfaction among advisors with production greater than $1 million fell by 4% to 683, while satisfaction among those with production below $250,000 grew by 5% to 799. The results show firms must do more to keep their star advisors happy alongside hiring and training new ones, according to Foy.

“Among investors, the most affluent and profitable clients tend to be the most satisfied because they get more attention and value from their firm,” Foy said in a statement. “With advisors, we see the exact opposite.”

Commonwealth received the highest ratings of any firm, at 946, closely followed by Edward Jones at 925. Edward Jones has taken the top marks among employee advisors for at least six of the past seven years. Raymond James took second place in both segments.

Wells Fargo Advisors drew the lowest marks of any firm with a score of 607, followed by Morgan Stanley and Merrill Lynch. LPL Financial, JPMorgan Chase, Cetera Financial Group, and Advisor Group also scored below the average scores for their segments, although fewer than 100 advisors from the latter three firms participated in the study.

WHY THE LONG FACE?
The Department of Labor rule sowed some of the negativity among employee advisors, according to J.D. Power. Some 64% say they expect it to drive smaller clients away, 58% expect it to cut into profits and 41% don’t completely understand the rule, which went into partial effect June 9.

Pay policies also caused low ratings for employee advisors. Just over half of them said their firm’s compensation did not improve or remain the same, and more than a third do not completely understand their firm’s pay plans.

J.D. Power asked advisors to provide ratings in seven areas, including pay, leadership, professional development, technology and client support. For this year's survey, the firm quizzed more than 2,700 advisors through mailings and emails between January and April.