More Evidence of Top Producers Receiving a Larger Slice of the Pie
Reports of advisor compensation changes from LPL and UBS highlight a change we’ve observed among financial institutions—firms are reducing payouts to bottom producers and enhancing payouts to top producers.
Despite the challenging market to attract and retain advisors, average advisor payouts in banks and credit unions have remained remarkably stable. Their wealth management units continue to pay out about 40% of gross revenue to the advisor force, although the effective payout has ticked up the past two years.
Firms appear to have been able to maintain that gross margin by skewing compensation plans to provide more compensation to top producers, shorting below average producing advisors.
We’ll check in on trends in advisor compensation in banks and credit unions this winter with our advisor compensation survey. We plan to sort through how firms are compensating the different roles that have emerged, from plain old branch-based advisor to senior advisors mentoring associate (junior) advisors, the associate advisors, second story advisors, and advisors in investment call centers. And team compensation structures.
Click here to participate in the Advisor Force Compensation Survey