Numbers Game

Numbers Gameblog

Latest research and trends from around the financial advisory business, updated regularly highlighting stats, charts, infographics and all things data.

How does your advisory firm stack up?

Comparing a firm's pay to the competition can point out vast flaws

Oct 18, 2017 @ 12:43 pm

By IN Research and Ellie Zhu

With talent so hard to find and keep at advice firms, each practice should have a clear handle on how well it is – or isn't – compensating its brilliant workforce.

The benchmarking data below show the greatest range of salaries occurs in what firms are paying their lead advisers, with the 3rd quartile of firms paying nearly twice that of the 1st quartile.

Of course, salaries are only part of what firms pay to employees. Total income for advisers shows bonuses vary greatly between positions, roughly doubling as professionals climb each rung of the ladder of adviser roles.

The analysis also shows exactly how top performers are pulling ahead of other firms, and the profitability measures and revenue per professional differences are huge.

All figures are from the 2017 Adviser Compensation & Staffing Report, which captures full income statements, assets and client information, management and staffing strategies, and staff compensation for 30 positions at 353 independent firms.

For more information, and to benchmark staffing levels, compensation and income statement data, visit the InvestmentNews dashboard.

Salary range
MEDIAN BASE SALARY
Practicing partner
Lead adviser
Service adviser
Support adviser

Median metrics and ratios
TOP PERFORMERS* ALL OTHER FIRMS
AUM $447,234,000 $205,000,000
Clients 335 242
AUM per client $1,000,000 $862,706
Revenue $3,162,500 $1,448,660
Revenue growth, 2015-16 7.3% 4.3%
Revenue per professional $730,231 $412,386
Operating profit margin 41.1% 14.8%
Pretax income per owner $729,473 $286,003
*Top performers are those firms that rank in the top quartile of a compound ranking of the following: operating profit margin, pretax income per owner, year-over-year revenue growth, revenue per professional and earnings before owner compensation (as a percentage of revenue).

Designations by position
Hold your cursor over the segment to see percentage
Certified financial planner (CFP)
Certified public accountant (CPA)
Chartered financial analyst (CFA)
Series 7
Practicing partner
Lead adviser
Service adviser
Support adviser

Owner Income
MEDIAN PRETAX INCOME PER OWNER BY FIRM REVENUE

Salary by position
MEDIAN TOTAL INCOME FOR ADVISER POSITIONS
HOLD YOUR CURSOR OVER THE SEGMENT TO SEE salary
Bonus
Salary
Total traditional compensation*
Practicing partner
Lead adviser
Service adviser
Support adviser
*Median, not sum of bonus and salary.

Staff levels
TYPICAL STAFF STRUCTURE AND HEAD COUNT BY FIRM REVENUE

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The Adviser Research Dashboard

Based on data collected through InvestmentNews' annual adviser research studies, this interactive, customizable tool allows you to view detailed data on compensation, staffing and financial performance practices from across the industry.

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