AdvisorHub Culture Study Part 1: 90% of Advisors Say That Firm Culture Matters

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An AdvisorHub/Edward Jones survey on culture reveals the workplace attributes financial advisors truly value. 

Financial-advisory firms who view “culture” as little more than a warm and fuzzy feature of company life do so at their peril. Indeed, culture matters greatly to advisors, according to the annual AdvisorHub Industry Culture Survey, sponsored by Edward Jones.  This piece is just the first installment of a six-part weekly series that explores how culture manifests itself at advisory firms.

Nine out of 10 of the survey’s 522 respondents say their firm’s culture is ‘’important to me.” And more than half of the respondents said they “recruit other advisors to my firm because of the culture.”

The “reputational integrity of a firm” was viewed by respondents as the most important factor in creating a great culture on a personal level. Other factors that mattered greatly included “consistent and transparent compensation”, and the “ability to serve clients’ needs regardless of a firm’s proprietary products.”

Though Edward Jones has had a long-standing commitment to building a positive corporate culture, the company decided to commission this industry-wide study “to see whether the rest of the industry felt it was as significant as we feel it is,” says Patty Carter, principal, financial advisor talent acquisition. “We wanted to verify that what we think about culture is true.”

Carter finds it heartening that more than half of the respondents said they recruit other advisors to their firms because of the culture. “It speaks not only to the importance of culture broadly, but also a culture that is collaborative versus competitive,” she says. This research affirms that financial advisors are looking for support and feedback from their fellow advisors.”

The survey, however, revealed some sharp differences between cultural factors that advisors viewed of importance to their companies and to themselves personally. For example, advisors at wirehouses – compared with their counterparts at RIA, independent broker-dealer firms, or national/regional firms  —  were more far likely to think that their companies didn’t value a variety of attributes that were important to them personally, such as consistent and transparent compensation, serving a client’s needs regardless of the firms’ products, or even flex time.

“As suspected, culture is an important factor in a financial advisor’s relationship with, and loyalty to, his or her firm,” adds Tony Sirianni, the chief executive officer and publisher of AdvisorHub. “We found a happy plurality of advisors who feel they have found a cultural fit at their current firms, which is great news for the industry. But we also found that happiness was not evenly distributed across firm types, with wirehouse advisors suffering through more cultural challenges than other channels by a wide margin.”

The study – which was conducted from mid-August to mid-September – surveyed advisors across a wide swath of firm types. RIA firms (19%), wirehouses (16%) and independent hybrid firms (9%) account for nearly half (44%) of advisor firms involved in the survey. In addition, national/regional broker-dealers (23%) and independent broker dealers (20%) account for nearly half of the remaining firms.

Roughly seven in 10 of the advisors who responded to the survey were male and 85% were white.

The survey defined a company’s culture as “shared values, attitudes, standards, and beliefs that define the nature of the company and offer the necessary support to help advisors be successful. “

When it comes to attributes of personal importance, advisors cited factors including, in order of importance.

  • An entire organization focused on the improvement of client experience
  • Access to comprehensive, integrated and client-friendly technology
  • The ability to serve clients seamlessly in a virtual capacity

Culture is about more than serving clients for financial advisors. Respondents also say that they want to work for a company that is “there to serve and support me,’’ including caring about their health and well-being and allowing for an environment in which advisors can share thoughts “without negative repercussions.”

When asked what cultural factors were most important to their firms, attributes diverged.  Financial advisors cited the following cultural factors of importance to their firms.

  • Reputation/integrity of the firm
  • Ability to serve clients’ needs regardless of firms’ proprietary products
  • Entire organization focused on improvement of client experience
  • Back office support

The study did provide some encouraging news for advisory firms overall: financial advisors by and large give strong marks to their firms’ cultures. Nearly three-quarters give their firms a score of “A” or “B” with 44% giving an “A” grade. Only 13% of the respondents give their firm poor or failing marks for their culture.

In the coming weeks, look for articles that, among other topics, delve into the role that culture can play in enhancing the client experience, creating more diverse advisor teams, and recruiting the best brokers from other firms.

Adds Carter, “Edward Jones believes continual investment in the associate experience is ultimately an investment in the client experience. In other words, investing in culture pays off.”

Carter advocates that firms must focus on and invest in culture, just as they would client experience. “The two are interconnected because in order for financial advisors to deliver an incredible client experience, they must operate in an environment where they are nurtured and can be their authentic selves.”

In next week’s installment, we focus on one of the study’s more intriguing findings: not all advisors think that their firms view culture the way they do.

Related posts:

AdvisorHub Culture Study Part 2: Is Culture More Important to Firms or Financial Advisors?

AdvisorHub Culture Study Part 3: Culture and the Client Experience

AdvisorHub Culture Study Part 4: How Culture Impacts Financial Advisors Considering A Transition

AdvisorHub Culture Study Part 5: What Makes an “A” Culture Firm

AdvisorHub Culture Study Part 6: How Financial Advisors are Mastering the New Virtual Culture

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