The research, sponsored by Pershing Advisor Solutions, found that average salaries for positions ranging from administrative assistant to chief executive are now increasing faster than firm revenue, a reality that is pinching firm owners.
“This is an industry with an oversupply of clients and an undersupply of people to provide advice,” said Mark Tibergien, chief executive of Pershing Advisor Solutions. “In any industry, that supply-demand scenario puts you in the catbird seat, but the problem in a personal service industry like financial planning is that an issue of capacity limits has been created.”
Essentially, advisers can only manage a certain number of relationships, and that means revenue growth is not increasing, he said.
Meanwhile, advisory firms are having to pay more to retain the best advisers and support staff.
Senior-level advisers saw the biggest spike in average salaries in 2017, with a gain of 23% from 2015. (The survey, which is fielded every two years, asks for current salary figures, whereas revenue reflects the previous year-end total: 2016 in this case. Revenue figures are gathered every year, as part of this survey and the complementary InvestmentNews Financial Performance Study.)
Support adviser and junior adviser salaries increased by an average of 13% and 14%, respectively, over the same period.
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