As Covid-19 began to rapidly spread in the U.S. last spring, financial advisors were fearful for their health, the well-being of others, and their businesses. The novel virus that caused the fastest-ever bear market, and required people to work from home, forced advisors to adopt new technology and rapidly evolve how they serve clients.
But the pandemic ultimately hasn’t threatened wealth management firms. Most were modestly impacted, increased the number of clients they served and the assets they managed. Advisors spent more time with family, had more opportunities to contemplate their businesses, and felt a renewed sense of purpose, according to the latest Advisor Wellness report by FlexShares.
[Like this article? Subscribe to RIA Intel’s’ thrice-weekly newsletter.]
Advisors were generally happy with their professional life, personal life, and the balance between them.
Although the causes of stress changed in 2020 (political uncertainty, regulatory issues, and client relationships took precedent), financial advisors reported the same level of stress as they did in pandemic-free 2018, the last time FlexShares conducted the study. But those results “reflect the overwhelmingly male composition of the financial advice business,” according to the report.
The industry’s women experienced a very different year.
In 2020, female advisors reported levels of stress significantly higher than their male counterparts and the national average.
Other leading stressors like “wearing multiple hats,” and juggling work and family life were especially challenging for women, the study found. In 2018, no significant gender differences were found in career-specific stressors.
“Some of these differences may be due to perceptions of the pandemic, since women were more likely than men to perceive it as a ‘real threat’ and reported increased stress in keeping elderly parents and dependents safe,” the report said.
But coping strategies might also be to blame. Both men and women said exercise and health were their top means to cope with stress. But while men also turned to “mindset” and “leisure” to manage stress, women focused on being “good to clients” and tasks or time management — both on-the-job mechanisms that might actually be counterproductive.
That’s not to say women are entirely at fault for their higher levels of stress than men. Companies can also better empower women to delegate work and offer more or better tools to help advisors manage their time.
“While all jobs cause stress of one sort or another, career seekers should understand how the benefits of independence and flexibility may better enable them to address the stresses that come from being a financial advisor,” the report says.
“Our research over the years indicates that advisors report success in managing stress by using on-the-job strategies in conjunction with off-the-job strategies. As a result, dealing directly with these issues in a business setting can lead to a significant reduction in overall stress, making the workplace more productive and rewarding.”
More than 450 financial advisors in 47 states participated in the FlexShares study conducted late 2020. They had a variety of tenures at different types of wealth managers. Only 17.5% identified as female and 82.5% male, which largely reflects the industry’s workforce. Most participants were white (88%) and the median age was 50 to 59 years old. Their median assets under management were $76 million to $150 million.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.
Subscribe to RIA Intel’s thrice-weekly newsletter and follow the publication on Twitter and LinkedIn.