FlexShares Exchange-Traded Funds (ETFs) announced the results of their second annual financial advisor wellness survey, which found that advisors are 23 percent more stressed than the national average, which is down only slightly from last year’s 25 percent, but nonetheless remain overwhelmingly satisfied with their career choice. Advisors reported 79 percent job satisfaction overall, with advisors who manage over $250 million in assets reporting 12 percent higher satisfaction than their peers with fewer assets under management.
The survey of over 600 advisors found that challenges associated with growing their practices (27 percent) and compliance and regulatory issues (19 percent) continue to be the top stress inducers, with nearly half of those surveyed citing these as their primary sources of work-related stress. However, new sources of stress arose in 2018 as well, including political uncertainty and market volatility.
Advisors ranked ‘political uncertainty,’ a new choice in the survey this year, as the top source of stress behind compliance and client growth at 18.5 percent and 27.2 percent respectively. Furthermore, while the state of the markets ranked relatively low on advisors’ list of stress-inducers for 2017, it increased by almost 19 percent in 2018.
“Despite growing pressures posed by factors outside of advisors’ control, like political risk and market volatility, advisors remain highly satisfied with their career choice,” said Darek Wojnar, Head of Funds and Managed Accounts. “To maintain this level of satisfaction potentially heading into an increasingly volatile market, it’s critical for advisors to seek out investment solutions that can meet their investment and business goals over the long-term and to devote the time needed to create an exceptional client experience.”
Advisor Stress Not Created Equal
New to the study this year, FlexShares further analyzed specific areas of stress and the breakdown of results across the advisor space. They found that advisor stress levels varied based on the type of firm and services offered, particularly in response to certain areas such as fees and regulation.
RIA respondents indicated fee and margin pressure as the least concerning business stressor compared to their peers, whereas regional advisory firms reported the highest levels of stress in that area. Furthermore, in an open-ended question about stress related to regulatory changes, RIAs were more likely to describe these changes as “not stressful,” compared to wirehouse advisors who described new regulation as posing “business risks” and “interfering with client perceptions.”
The survey also found differences among advisors based on the level of services offered to clients. Advisors who described their role more holistically in terms of “wealth management” or “financial planning,” were 31 percent more stressed than those who described their role solely in terms of “investment management.”
“As advisors shift towards managing an increasing portion of their clients’ financial lives through comprehensive wealth planning, our results show this may lead to greater levels of stress,” said David Partain, Head of Marketing at FlexShares. “By working with external partners that prioritize their success and well-being, advisors can better manage these changes and lead more fulfilling, satisfied lives.”
Gaining Peace of Mind
In addition to identifying the sources of their stress, advisors were asked to detail how they’re managing this stress. Confirming last year’s survey findings, FlexShares again found that advisors who change their work habits, such as time management, delegation, and enhancing client relationships, are more likely to reduce stress than those who rely on methods outside of work, like meditation, exercise, or leisure activities.
Those who used outside of work strategies were 19 percent more stressed than advisors who implemented on-the-job changes. This shows that the best way for advisors to handle the stresses of the job is to tackle them head on.
For more market trends, visit ETF Trends.