When it comes to advisor compensation, higher inflation and company evaluations could be something of a boon to FAs because higher asset values would increase fees for managing those assets.
That’s according to compensation consultant Andy Tasnady, who helped develop Financial Planning’s continuing annual analysis of advisor compensation by looking at payout rates at wirehouses, regional and national broker-dealers.
“That will accelerate grid creep. More and more advisors will get into higher and higher compensation brackets. That puts pressure on payout rates,” Tasnady says. “But in general both firms and advisors make more money in real terms from that growth even if the margin isn’t affected. This is still a high margin business.”
Scroll through to see where your firm stacks up. To see last year’s data,
Data was collected by Arizent and analysis conducted by Tasnady and his firm, Tasnady & Associates.
A note about this year’s analysis: A number of special policies are not included here because they do not affect 100% of the advisor population evenly and therefore are more haphazard to compare. Individual results can vary dramatically, based on the mix of business and policies at each firm. For example, pay can rise from special bonuses and fall from penalties such as discount sharing, small client limits and ticket charges.
Assumptions for basic pay (prior to special policies/contingent bonuses):
- 25% in individual stocks; 25% in individual bonds; 25% in mutual funds; 25% in fee-based (wrap accounts, managed accounts, etc.)
- Year-end basic bonuses are shown in deferred totals.
- Length of service is assumed to be 10 years.
- Assumes no impacts from bonuses based on growth, asset-based bonuses or other behavior-based awards.
- Excludes voluntary deferral matches, 401(k) matches or profit-sharing contributions, unless otherwise noted.
- Does not include: T&E expense allowance, discount sharing or ticket charge expense assumptions, small household or small ticket policy assumptions, or value of any options awards.
