J.D. Power's Best Firms for Financial Advisors

Cambridge Investment Research, led by Chairman Eric Schwartz (left, a 2010 Investment Advisor Broker/Dealer of the Year), follows with 848 points. It performs particularly well in products for clients and job duties as it relates to flexibility in choosing products and services to recommend.

Raymond James Financial Services. led by Chairman Tom James (left), ranks third with a score of 845, and performs well in firm performance, products for clients and the usefulness of the firm's investment research.

"As the financial troubles, compliance violations and merger and acquisition activity of some of the largest wealth management institutions begin to fade from memory, sentiment among financial advisors appears to be settling back in place," David Lo, director of investment services at J.D. Power and Associates, said in a statement. "Perceptions of financial stability hit a low point in 2008, but now appear to be improving. This is particularly important because brand image is such an important element that drives advisors' perceptions of their firms overall."

The study also finds that a majority of the best practices that drive advisor satisfaction center on maximizing the time advisors can spend with their clients and minimizing the time spent on administrative activities. For example, among employee advisors, best practices include providing dedicated compliance support, software programs that are aligned with daily workflow processes and same-day contact from IT support. Likewise, for independent advisors, best practices include adjusting the workload so that only 15% or less of a typical week is spent on compliance-related tasks such as paperwork, and providing completely integrated software programs.

"Fundamentally, the firms that maximize the amount of time advisors spend with clients and minimize the time they spend on administrative tasks benefit from high levels of advisor satisfaction, which translates into high retention and retained assets under management and production," Lo said. "In the full service investing industry, client loyalty is often more closely aligned to the financial advisor rather than the firm. Dissatisfied advisors who leave their firms often take a majority of their clients with them, hitting the firms with a double whammy—a substantial loss in assets under management on top of the costs associated with training and recruitment."

The 2010 U.S. Financial Advisor Satisfaction Study is based on responses from more than 2,800 financial advisors who hold a Series 7 license. Survey sample and industry weighting was provided by Qualified Media and Investment News. The study was conducted in two waves between February and March 2010 and July and September 2010.