Bank-Based Advisor Payouts Comparable to Wirehouses and National and Regional Firms
Financial Planning’s annual analysis of advisor pay in wirehouses and regional firms is out, just in time for the Kehrer Group’s survey of advisor force compensation in banks and credit unions. The average annual production of advisors in our survey of banks and credit unions was $694,019. The average effective payout — cash compensation divided by annual gross production — in the Financial Planning data at $600,000 in annual production ranged from 32.3% to $43.5%, with an overall average of 40.2%. Our data show that $600,000 producers in banks and credit unions earn 40% of gross, on average.
Effective Payouts at $600,000
|
Institution |
Average Effective Payout (%) |
|
| Merrill Lynch | 39.0% | |
| Wells Fargo | 42.4% | |
| Morgan Stanley | 39.4% | |
| UBS | 32.3% | |
| Edward Jones | 39.4% | |
| Stifel | 42.5% | |
| RBC | 43.0% | |
| Raymond James | 43.5% | |
| Janney | 40.0% | |
| Average: | 40.2% | |
Source: Financial Planning
For the typical bank-based advisor, payouts stack up well against the major non-bank firms.
We unpacked our initial findings from our advisor force compensation survey at the Spring Meeting of our Leadership Study Group in Durham May 6-7.
About the Kehrer Group Survey of Advisor Force Compensation
We have obtained compensation plans and actual compensation and production information covering over 1,600 advisors in more than 300 banks and credit unions, for all their advisor roles – branch-based advisors, second story advisors, senior advisors in teams, remote advisors (including call centers), wealth advisors, and associate advisors/trainees. Over the summer participants will receive a series of reports on each advice role.
We are marrying the compensation information with the data on firm performance the same firms provided in our benchmarking surveys. Our objective is to not just describe how the various advice roles are compensated, but to also assess how the components of the compensation plans achieve management’s objectives, including attracting and retaining advisors, encouraging advisors to stretch and produce more, incenting specific advisor behaviors such as conducting more planning, meeting clients’ risk management needs, cleaner paperwork, and enhancing the client experience, all the while managing advisor force expenses.