The average annual compensation of financial professionals, now approaching $100,000, is up 4 percent from the level recorded in 2010, according to a new report.
The Financial Planning Association, Washington, D.C., discloses this finding in the FPA’s “2012 Financial Planning Salary Survey.” Based on more than 1,000 responses from financial advisors, the survey reviews compensation for 21 positions within a firm.
The report shows that, on average, sole practitioners receive an annual compensation of $98,049 (not including money invested in their practice). This is just over a 4 percent increase compared to the $94,125 reported in 2010.
By region, financial professionals working in the West-North-Central states earn the most on average at $107,000. This compares with average annual earnings of $106,203, $88,540 and $87,500 for the Pacific, Mountain and West-South-Central states.
By years of experience, the report adds that advisors who have practiced for more than 20 years earn the most annually: $124,836 on average. The annual comp declines to $117,445, $90,645 and $58,929 for advisors possessing, respectively, 13-20 years, 7-12 years and six or fewer years of experience.
Measured in terms of qualifications, advisors who are licensed in property/casualty insurance earn on average the most at $162,500. The amount declines to $106,307 and $102,795, respectively, for advisors licensed in life and health/disability income insurance.
Financial professionals who have Series 6 and Series 7 securities licenses earn on average $111,722 and $114,068, respectively. Certified financial planners, by contrast, have a mean annual compensation of $103,923, while chartered financial consultants garner $160,300 on average.
Taking more vacation time does not translate to less pay for sole practitioners, the report adds. Those who take more than 30 days out of the year earn on average $109,244 annually. By comparison, advisors who take off 21-30 days, 15-20 days and 14 or fewer days earn on average $10,212, $89,940 and $99,935, respectively.
Most financial planning firms (96.9 percent) offer at last one type of benefit to their employees. Among those practices with 6-30 employees, life insurance, retirement plans (e.g., 401(k) or pension) and time off/paid leave/sick time are offered by 93.2%, 90.9 percent and 96.2 percent of firms, the report states.
Among firms with 31 or more employees, these benefits are universal. But in practices where there are from one to five employees, the percent of firms offering these benefits decline to 65.8 percent, 77.7 percent and 85.9 percent, respectively.