FP Transitions has rolled out a new compensation benchmarking tool inside its FP Insights platform, offering new a new intelligence layer for an industry squeezed between rising pay costs and a shortage of advisors to fill open seats.
The valuation, succession planning and M&A consulting firm's inaugural compensation dataset, drawn from 770 advisory firms and 7,292 individual records as of July 28, spans six cohorts ranging from firms with less than $100 million in assets under management to those managing more than $1 billion.
Unlike a typical salary survey, the tool peels back how base pay, bonuses, benefits, ownership and profit distributions can shape a firm's broader talent and growth strategy, according to FP Transitions CEO Brad Bueermann.
"Compensation benchmarking has traditionally focused on the question, 'What should I pay someone in this role?' We think firm owners should be asking a much broader set of questions," Bueermann said ina statement. "How are we rewarding performance? When should ownership enter the conversation? What benefits do we need as we grow? Can our best people see an economic future inside this business?"
The launch follows FP Transitions' introduction of its Estimated Value Index last month, and the company said it plans to eventually link its compensation, ownership and valuation data into a single view for firm owners weighing hiring, retention or a future sale.
FP Transitions' early analysis flags equity, not incremental raises, as the more consequential financial decision for experienced advisors. Tenure and production alone do not guarantee a stake in a firm, the company said, noting how an individual contributor's strong performance can lay the groundwork for a future ownership stake. The FP Transitions data also points to structured incentive plans – as opposed to discretionary, management-driven bonuses – as a way to more clearly connect performance to pay.
According to data from Schwab's 2025 RIA Benchmarking Study, roughly one in three staff members across the independent firms it surveyed are equity owners, and 41% of firms with more than $1 billion in assets offered equity to advisors who joined with an existing book of business. Beyond that, 79% of firms provided performance-based incentive pay in 2024, and firms using it posted five-year revenue growth 24% greater, on a compound annual basis, than firms that did not.
The compensation tool builds on groundwork FP Transitions laid earlier this year in a joint survey with the FinServ Foundation, which examined what the next generation of advisors wants from an employer.
Among the 100 students surveyed this year, 80.2% named base salary among the compensation factors that matter most, followed by retirement benefits at 53.5% and flexible work arrangements at 39.6%. Only 13.9% cited equity or stock compensation – a gap FP Transitions frames as a disconnect firms will need to close as those students move into ownership-track roles.
Schwab's benchmarking study estimated the RIA industry will need to hire more than 70,000 new staff over the next five years to keep pace with growth alone, without accounting for retirements or attrition. As part of that work, it emphasized the importance of building a formal employee value proposition, which ideally includes financial rewards beyond base salary (used by 90% of top-performing firms), nontraditional employee benefits (used by 67%), and equity ownership opportunities (included by 45%).
For its part, FP Transitions said succession planning should go further than naming a potential successor, emphasizing the need to address questions around valuation, financing, timing, and how employees can progress into investors and owners. Advisory firms that are serious about growing beyond founder-led practices should also offer robust benefits including health coverage and retirement programs as part of the recruitment and retention equation.
"Compensation is one of the biggest investments an advisory firm makes, but the individual components are often evaluated separately," said Tom Kimberly, chief operating officer of FP Transitions. "Over time, we can bring together compensation, ownership, valuation and other business intelligence to help advisors better understand not only where their firm stands, but the decisions that can help move it forward."
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