Looking at any job or career path, a natural question arises: What am I going to be paid?
For advisors, the answer isn’t always straightforward. In fact, it’s quite complex and changing. That’s why Financial Planning has dedicated this issue to examining a complicated topic: What’s next for advisor pay?
To get a better handle on the latest trends in compensation, we broke it down into two pieces. First, contributing writer Kenneth Corbin examines how RIAs have increasingly turned to benefits packages to attract talent. This trend has only accelerated in 2020 due to the coronavirus pandemic. In some cases, RIAs are adding to their benefits packages (think better health care and flexible work-from-home policies). In other instances, it’s more a matter of putting the spotlight on existing benefits that were perhaps overlooked before.
“All those things can amount to tens of thousands of dollars, and most firms don’t take credit for that. They’re missing an opportunity,” Anand Sekhar, vice president of practice management and consulting for Fidelity Institutional, tells Corbin.
Senior editor Toby Salinger looked at the evolution of compensation in the IBD space, where firms are taking a cue from smaller RIAs. Independent broker-dealers are building up a small but growing number of fee-only advisors. And IBDs are increasingly enabling subscriptions, fee-for-service planning or retainers in addition to the typical asset-based fees, Salinger writes.
“That flexibility is needed going forward. If you don’t provide the option today, you’re going to have to provide that option in the future,” Colleen Bell, chief fiduciary service officer at Cambridge Investment Research, tells Salinger.
Salinger has also put together a podcast that dives into other compensation changes across the industry, from what to expect in wirehouse compensation plans to efforts to root out conflicts of interest. You can find it on our website and in iTunes.