A job as a financial adviser may lack the cachet of a position with a white-shoe Wall Street investment bank, but when it comes to salary and flexibility, the industry can make a pretty good pitch.
This is especially true for top brass. Partners at financial advisory firms can expect to make a median salary of $324,000 per year, according to InvestmentNews Data. Those in the lower ranks, however, may spend much of their 20s wishing they had picked a more lucrative profession. An InvestmentNews analysis shows that a new financial advisory professional can expect relatively slow salary growth in the early years.
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For example, after five to seven years, a senior client services administrator can expect to make about as much as an accountant with only two years' experience. A senior research analyst can expect to make less than an attorney recently out of law school.
Still, this differential hasn't hurt the industry, said Kelli Cruz, a partner at Cruz Consulting Group, which works with financial advisers. There are a lot of intangible benefits to being a financial adviser that continue to make the field attractive — especially to younger generations, she said.
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Young financial advisers tend to be granted responsibility very quickly. This is especially true in comparison with new hires at large financial services organizations, who ascend the ranks much more slowly, she said.
The industry also offers a level of work-life balance that can't be found easily elsewhere. “There seems to be a lot of flexibility in terms of firms offering employees time off,” Ms. Cruz said. “Is this a trade-off for cash value? I believe it is.”
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Finally, financial planning is a helping profession and, as such, offers employees a chance to add clear value for a client that can rarely be matched in other corporate settings.
There's evidence that all these invisible perks add up. For example, the typical financial advisory firm rarely has a problem with retention. When employees do leave, it's often because of a breakdown in work culture that causes some of these intangible benefits to disappear, Ms. Cruz said.
For the more financially minded, never fear. Not only would the ascent to partner status push a financial adviser practically into the 1%, the establishment of an independent advisory practice is also a pretty reliable path to six figures. The typical adviser who runs a solo practice earns $217,814 annually, according to InvestmentNews Data.
“There is an argument that even as a sole practitioner, if you keep expenses down, you can make a lot of money,” Ms. Cruz said.