For the second time in a row, J.D. Power and Associates ranks Commonwealth Financial Network “Highest in Independent Advisor Satisfaction among Financial Investment Firms.” See: Commonwealth raises payouts for big advisors and slashes trading commissions.

Raymond James also acquitted itself well — not only placing second in this independent category but placing second behind Edward Jones in the employee-advisor category, according to the J.D. Power and Associates 2012 U.S. Financial Advisor Satisfaction Study released today. Raymond James was followed by Schwab, RBC Wealth Management, Merrill Lynch, Morgan Stanley and Wells Fargo in this ranking.

Commonwealth Financial Network of Waltham, Mass. and San Diego, Calif. received five out of five JDPower.com Power Circle Ratings, putting it “among the best” in seven of the eight key drivers of satisfaction—firm performance, people, technology, compensation, contact, job duties, and product offerings for clients. Behind Commonwealth and RJ respectively came: Northwestern Mutual, Wells Fargo’s FiNet, LPL Financial, Cetera, Ameriprise, Advisor Group and NFP.

There is a reason that Commonwealth is able to deliver service and technology to its 1,400 advisors that gets such accolades, according to Commonwealth CEO Wayne Bloom in a release. See: Three more major firms decamp from troubled Securities America to Commonwealth.

Not beholden

“We are able to focus on our advisors, and provide them with leading products and services, because we are truly independent—we have no debt, are not beholden to any outside investors, and are privately held by our founder and managing partners.”

Some of Commonwealth’s big competitors include Cetera Financial Group, which is owned by Lightyear, and LPL Financial, which is both publicly traded and held by private investors. See: What the Cetera-Genworth IBD deal says about where these companies are headed.

David Lo, director of investment services at J.D. Power and Associates makes a similar statement in the press release related to this announcement.

“Ultimately, financial advisors want to work with a firm whose actions are in the best interest of clients,” says Lo. “Firms that stray from this fundamental principle diminish the connection with their advisors and eventually damage the overall culture of the firm.”

Wayne Bloom: We have no debt, are not beholden to any outside investors, and are privately held by our founder and managing partners.
Wayne Bloom: We have no debt,
are not beholden to any outside
investors, and are privately held by
our founder and managing partners.

Poorer work experience begets retention bonuses

“Providing the right mix of technology and support to advisors, thus optimizing the time they spend with clients, has the biggest impact on satisfaction,” says Lo. “It’s no coincidence that the firms struggling with the key best practices identified in the study are also paying the highest retention and signing bonuses to compensate for a poorer work experience.”

The study also finds that firm performance continues to be the most important factor that drives advisor satisfaction among both employee and independent advisors. Satisfaction is based on advisors’ perceptions of their firm, including senior management that support the firm’s mission and values, the firm having a clear set of priorities and objectives and the firm acting in the best interest of clients.

“Ultimately, financial advisors want to work with a firm whose actions are in the best interest of clients,” says Lo. “Firms that stray from this fundamental principle diminish the connection with their advisors and eventually damage the overall culture of the firm.”

Commonwealth received an overall satisfaction rating of 917 on a 1,000-point scale, compared to an industry average of 774, and performed particularly well in factors of job duties, firm performance and technology.

“Providing the right mix of technology and support to advisors, thus optimizing the time they spend with clients, has the biggest impact on satisfaction,” says Lo.

The 2012 U.S. Financial Advisor Satisfaction Study is based on responses of nearly 2,800 financial advisors. The study was conducted between November 2011 and January 2012.

Better known for rating cars, J.D. Power has views on advisors.
Better known for rating cars, J.D.
Power has views on advisors.