Financial advisors are more stressed than the average worker
Advisors are more than just money managers. The desire to help others means that client relationships sometimes can become deeper than typical business associations. As a result, financial advisors can end up playing many roles, including friend and therapist to their clients.
“Our client base consists of about 150 households — some of which we have known for many years and multiple generations,” says Wells Fargo advisor Susan Brown. “They’ve grown to be my friends and I am genuinely upset and stressed out when I hear about some of their personal challenges. When I learned, for example, that seven clients were diagnosed with cancer or a serious health issue over a six-month period, it emotionally flattened me.”
A toll such as that can amplify the traditional job-related stress an advisor is already feeling. Work-related stress can be especially challenging for financial advisors when compared to other workers.
Indeed, advisors in the U.S. report average stress levels that are 25% higher than the national norm, according to a survey conducted by Northern Trust’s FlexShares, an ETF provider. The stress level measure comes from asking advisors and other workers to rate their stress levels on a scale of one through 10. On this scale the level of stress for U.S. workers overall is 36.4%, the analysis shows, but for advisors that figure comes in at 48.5%.
Male advisors reported 26.2% higher levels of stress than the 37.8% national norm for men. Female advisors reported 18% higher levels of stress than the 45.6% national average for women.
Younger advisors feel the most stress, as planners under the age of 50 have over 39% greater stress levels than the national norm, according to the survey. The study also found that only 32% of advisors with 20 or more years of experience suffer from work-related stress, as compared to 41% of advisors with less than three years of experience.
Advisors are feeling more pressure than other U.S. professionals due to a heightened regulatory environment and the need to constantly grow their businesses, says Darek Wojnar, the head of funds, including FlexShares ETFs, and managed accounts at Northern Trust Asset Management.
FlexShares surveyed 700 planners and determined that compliance and regulatory issues (29%) and the challenges of growing their practices (25%) rank among the top stress inducers for advisors. More than half of those surveyed said these are their primary sources of work-related stress.
Wojnar and David Partain, head of marketing at FlexShares, conducted the survey in order to get a better sense of the challenges planners face as a group of professionals.
Regulation can be stressful to advisors largely because of the uncertainty involved, Partain says. And as for increasing AUM and growing their practices, that goes directly to whether they’ll survive in this business. “As [planners go] longer in the industry, if they’re going to last, really by the three to five year mark that’s when they decide to go do something else, or they’ve collected enough AUM to be able to sustain as an advisor,” he said.
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Other advisor concerns include having to balance work and personal matters (12%), wearing multiple hats (10%), tracking the state of the markets (8%) and effectively managing client relationships (7%).
To be sure, some stress is inevitable to succeed in this job. “Our clients operate in an increasing globalized environment,” says Wells Fargo advisor Pouya Lavian. “From our team analysts right up to our partnership, intellectual curiosity is a must, and we are always asking the question 'what are we missing?' That requires a requisite level of dynamic tension and stress — we stay on our toes so our clients can sleep better at night.”
FOCUS ON THE GOOD POINTS
Despite all of this stress, the survey also found that financial advisors are “quite satisfied as a group with their profession,” Wojnar notes. Advisors have come up with various coping mechanisms including exercise, changing their mindset and altering work habits.
Some advisor tips for reducing stress include staying active and finding joy anywhere you can.
“The natural endorphins will keep you in a better mood and less stressed,” says RBC advisor Nora Yousif. “Also be sure to mix it up and consider skipping the sit-down lunch and opt to go for a short run or workout at noon. When collaborating with others, consider a walking lunch with a co-worker or colleague vs a working lunch. I find I get just as much covered, our content tends to be more creative, and we come back to our desks refreshed.”
Yousif also suggests advisors “strive to have fun every day. Sure not all days are a joyride, but seek out the humor in even the most mundane,” she says. “It’s important we all laugh when we can. After all, we have to focus on the bright spots to offset the inevitable dark patches we face riding the tumultuous market, staying on top of the often gloomy news headlines, and being on the receiving end of calls for clients and colleagues’ most tragic moments.”