CHICAGO--(BUSINESS WIRE)--Northern Trust Asset Management’s FlexShares® Exchange Traded Funds today announced the results of its third financial advisor wellness survey, which found that advisors remained highly resilient during the pandemic and that the majority were able to grow their business in 2020. Furthermore, most financial advisors didn’t perceive the pandemic to be a threat to their business and are overwhelmingly satisfied with their career choice.
The survey of over 450 advisors found that the majority (62%) grew net assets under management amid the pandemic and 57% increased their number of clients served. Only 7% reported a decline in assets and 6% a decline in clients. The shift to remote work did not impede business growth for most, as advisors indicated that the impact of COVID-19 on managed assets was relatively neutral. And, they found several positive outcomes from pandemic-related changes, such as increased time with family (51%) and an opportunity to rethink their role or business model (46%).
Advisors’ overall stress level in 2020 (48.4%) was essentially on par with 2018 (48.2%), despite unique challenges. Their main source of stress was political uncertainty (48.3%), outweighing factors such as state of the markets (41%), the top source of stress in 2018. Beyond the political climate, advisors remain consistently stressed from building their business (44.3%) and compliance and regulatory matters (43.5%), which also ranked highly as sources of stress in 2018. These percentages were derived from a scale with “100%” being most stressful.
Advisors Highly Satisfied with Career Choice
Despite the challenges that marked 2020 — including approximately seven in 10 advisors being uprooted from their normal work environment — overall career satisfaction and work-life balance were virtually unchanged and largely positive. Advisors reported occupational satisfaction of 78% in 2020, as compared to 76% in 2018. This may be due to the fact that advisor satisfaction is primarily driven by factors that were reinforced throughout the pandemic.
When asked what they loved most about being a financial advisor, respondents overwhelmingly stated the ability to help and provide service to those who need it (58%), followed by independence and flexibility (19%) and the relationships that they form (13%). Moreover, when asked about pandemic “silver linings,” approximately a third of respondents (36%) reported that the pandemic provided a renewed sense of purpose in their work.
"It’s encouraging that even after a year of extraordinary challenges and stresses for the nation as a whole, advisors continue to feel great satisfaction in their jobs and generally prosper," said David Partain, Head of Marketing at FlexShares. "As advisory firms consider what their future work environment will look like, they should be mindful of these ‘soft’ factors that kept advisors highly satisfied amid the pandemic, such as feeling a sense of purpose and having flexibility, which could play a role in future recruitment and retention."
Female Advisors Reported Greater Stress
As COVID-19 continues to have an outsized impact on women in the workforce, female advisors reported significantly higher levels of stress than male advisors (55.3% vs. 46.9%), and stress levels higher than the national average of 48.9%. The average stress level for women advisors increased from 53.7% in 2018, while the average stress level for male advisors declined slightly in the same two-year period from 47.1% in 2018.
This stress was driven by a unique mix of factors. For example, having to wear “multiple hats” and balancing work and family life were found to be more stressful for female advisors than for their male colleagues. Women also found keeping elderly parents or dependents safe during the pandemic to be more stressful of a responsibility. And while women advisors experienced the same stress-related symptoms as men, the degree to which female advisors suffered from these symptoms was greater across the board.
"We’ve seen that across the workforce, the pandemic has uniquely impacted women and magnified existing stressors to their work-life balance. However, we believe there are actionable ways the industry can help support female advisors and make the workplace more rewarding," said Laura Hanichak Gregg, Director of Practice Management and Advisor Research at FlexShares. "In general, women are typically better reporters of stress, which can lead to reaching out for help to better manage it. Advisory firms should actively encourage this open discussion of stress factors and offer coping mechanisms – for all genders – such as flexible work arrangements and support on task and time management. These ‘on-the-job’ strategies can help promote significant stress reduction and a more attractive work environment.”
Coping with Stress
Based on FlexShares’ research over the years, advisors report more success in managing stress by using on-the-job strategies such as time management, delegation, and enhancing client relationships, versus off-the-job strategies like meditation, exercise, and leisure activities. While most advisors turn to exercise and attention to health as their primary tools for handling stress (25%), FlexShares found that dealing with these issues directly in a business setting leads to a substantial reduction in overall stress.
About the FlexShares Advisor Wellness Survey
This is the third iteration of the survey on financial advisor wellness conducted by Northern Trust's FlexShares. The survey was conducted in October 2020 and a total of 462 advisors participated. It aims to provide insight into work-related stress for advisors and the strategies they use to manage it, with the intent to measure trends over time. To view more results, visit https://go.flexshares.com/wellness.
FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that can improve and simplify the investment decision process for the long-term investor. Please visit our website or connect with us on our LinkedIn page.
About Northern Trust Asset Management
Northern Trust Asset Management is a global investment manager that helps investors navigate changing market environments, so they can confidently realize their long-term objectives. Entrusted with US$1.1 trillion of investor assets as of December 31, 2020, we understand that investing ultimately serves a greater purpose and believe investors should be compensated for the risks they take — in all market environments and any investment strategy. That’s why we combine robust capital markets research, expert portfolio construction and comprehensive risk management to craft innovative and efficient solutions that deliver targeted investment outcomes. As engaged contributors to our communities, we consider it a great privilege to serve our investors and our communities with integrity, respect, and transparency.
Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Belvedere Advisors LLC and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 U.S. states and Washington, D.C., and across 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2020, Northern Trust had assets under custody/administration of US $14.5 trillion, and assets under management of US $1.4 trillion. For more than 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/united-states/terms-and-conditions.
Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest.
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An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. The Funds are subject to the following principal risks: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; infrastructure-related companies; interest rate / maturity risk; issuer; large cap; management; market; market trading; mid cap stock; MLP; momentum; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in the prospectus.