Bluerating | October 2022

Once again, financial advisors remain the most satisfied with their job compared to bank employees or independent advisors.

The difference is not unimportant, as evidenced by the surveys conducted annually by FINER Finance Explorer on over seven thousand financial professionals, including Financial Advisors, Private Bankers and Bank Managers.

Without doubt, the job of financial advisor has two successful traits which sets it apart from the job of employees and independent advisors.

The first is entrepreneurship, a feature inherent to the profession. Entrepreneurship ensures a higher level of autonomy compared to bank employees, which in turn generates more gratification and full recognition of one’s skills and individual merits.

The second feature is connected to the role of the bank/financial network: a well-known brand and a good reputation can be an advantage normally unavailable to independent advisors.

Then, for skilled financial advisors all this results in a higher level of satisfaction with the remuneration package as well, which has been growing consistently over the past four years (+3%, from 2018 to 2021).

However, such growth trend has stopped in 2022, particularly when it comes to two components of the remuneration package: non-monetary contests (-1%) and front fee (-2%).

The reason is quite patent: the effects of the pandemic first and then the Russian invasion with the resulting geopolitical crisis have contained the growth rates, which, albeit positive, are on average below the 2021 results.

Nothing new, then, given that financial advisors are generally ready to handle the complexities of the market; except that, on the horizon, there are some news which will accompany the introduction of the new MiFID3.

With regards to the remuneration of financial advisors, there have been two EU consultations: concern was expressed over the payment of incentives, which can lead to conflicts of interest despite current regulations.

During the first consultation, ANASF confirmed its key role with a proposal designed to protect all stakeholders by stabilizing remuneration in the field of financial consultancy.

During the second consultation, deemed by many a true attack against networks of financial advisors on the part of ESMA, Assoreti answered through Consob.

The idea has been lingering since MiFID1 and will certainly be relaunched during the next revision of the directive (MiFID3) – it is about bringing the activity of financial advisors towards the provision of advice on an independent basis.

It is worth recalling that, in 2013, ANASF had suggested a European Contract for Financial Consulting, born from the analysis of all the main existing contracts between several intermediaries and their revision based on equity and tutelage.

Some points have already been achieved: 1) placement of third parties in order to comply with the obligations dictated by MiFID, ESMA; 2) inclusion of the provision of advice in the art. 31 of TUF (FAs entitled to operate off-site); 3) reception of the team on the part of intermediaries in order to better the quality of financial consultancy, ease the collaboration between financial professionals with different expertise and the inclusion of young professionals.

Moreover, traineeship as a condition to gain access to the profession of financial advisor proposed by ANASF to Consob, and brough by the latter to ESMA, has become a European requirement.

For this reason, we are sure that the EU will bear in mind the help that the industry of asset management and financial consultancy is currently giving to our Country.

Nicola Ronchetti