One of the best parts about being a financial advisor is that you can almost always count on a comfortable salary. But how much do financial advisors earn, and what factors affect their pay?
This article will explore financial advisor salaries, including average earnings and factors that can impact pay.
The Average Earnings of Financial Advisors
According to the Bureau of Labor Statistics, financial advisors earned a median salary of $88,890 in 2019. The top 10% of financial advisors earned more than $208,000, while the bottom 10% earned less than $39,910.
These figures reflect base salaries only and don’t include commissions, bonuses, or other forms of compensation financial advisors may earn. For example, some financial advisors receive a percentage of the assets they manage as a fee. Others may work for commission-based financial firms and earn a commission on the products they sell, such as investments or insurance.
Furthermore, if you are the owner of a financial advisory firm, your earnings will be much higher than those of financial advisors working for someone else. The size and clientele of your firm will also play a role in how much you take home each year. However, firm owners typically earn a six-figure salary.
Factors That Influence Earnings
A financial advisor’s earnings can be affected by several factors, including:
- Location: Financial advisors in large metropolitan areas earn more than those in smaller towns or rural areas. For example, financial advisors in New York City earn a median salary of $112,770, while those in Wichita, Kansas, earn a median salary of $81,160.
- Services provided: Financial advisors who provide more services, such as financial planning and investment management, tend to earn more than those who offer only one service, such as stockbroking.
- Certifications and credentials: Financial advisors with certain credentials and financial certifications, such as the Certified Financial Planner (CFP) designation, tend to earn more than those without these credentials.
- Years of experience: Financial advisors who have been in the industry for a longer period tend to earn more than those new to the field.
How to Determine You And Your Employees’ Pay
If you are a financial advisor firm owner, how do you determine your and your employees’ salaries? There are a few things you should do to calculate the best salaries:
- Research Your Competitors: Knowing what other financial advisory firms in your area are paying their employees will help you set competitive salaries. Use salary surveys and job postings to gather data on financial advisor salaries in your area.
- Consider the Cost of Living: The cost of living can vary greatly from one location to another. For example, financial advisors in New York City will need to earn a higher salary than those in Wichita, Kansas, to maintain the same standard of living.
- Factor in Education and Experience: As financial advisors gain more experience and education, they will be able to command higher salaries. Make sure to factor in a financial advisor’s years of experience and credentials when determining their salary.
- Consider Past Performance and Customer Satisfaction: Financial advisors who have performed well and maintained high levels of customer satisfaction should be rewarded with higher salaries. This will help you retain your best financial advisors and keep them motivated to continue providing excellent service to your clients.
Financial advisors can make a good living, with the median financial advisor salary being $88,890 in 2019. However, several factors can influence a financial advisor’s earnings, such as location, services provided, and certifications.
As the owner of a financial advisory firm, you will need to consider these factors when determining your and your employees’ salaries. By doing so, you will be able to attract and retain the best financial advisors for your firm.