Financial Advisers/Planners

Financial Advisers / Planners

Headline stats

81% male, 18% female, 1% prefer not to say
59% Independent, 41% restricted
96% full time, 4% part-time
86% employed and 14% self-employed
76% directly authorised and 15% members of a Network (with 9% other or N/A)
39% qualified to Level 4
50% Chartered and 9% expecting to be Chartered this year

Organisation size

Respondents came from a very broad range of organisations as the chart below shows with 32% in firms with headcounts up to 20 and 22% in firms with more than 1000 employees.

Adviser Age Range

The average age of an adviser is 44, and this figure has remained fairly constant for several years. Some firms have implemented academy/apprenticeship schemes, and the trend of transitioning from paraplanner to adviser continues. However, it would be beneficial to see more individuals under the age of 30 entering the field.

Headline salary, bonus & earnings for advisers

Over the last year whilst salaries for advisers have shown a healthy increase of 12.5%, the big change is in bonuses, which have increased by over 23%, resulting in increased earnings of 14.9%. For employed advisers below we show the overall averages and then the distribution to give a more complete picture of the adviser’s earnings pattern.

Bonus for advisers

Bonus distribution for advisers

Total earnings for advisers

Earnings distribution for advisers

Total earnings for self-employed advisers

These figures are particularly high but show no change over the previous year. Straight comparisons with employed advisers are difficult as extra costs are incurred in the self employed model, lower benefits etc.

What factors determine adviser earnings?

In this section we looked at a number of factors:-

Qualifications
Age
Location
Gender
Type of authorisation/ network membership
Organisation size
Type of firm: restricted or independent

Qualifications

We can see below that Chartered status has a material impact on earnings with a premium of 33%.

Impact of age on adviser earnings

This shows clear peak earnings from age 40 to 60 with a slight drop off for the 60 to 70 group. In this age range many advisers would be considering an exit or at the least, cascading clients down to younger colleagues.

How does location affect earnings for advisers?

With the exception of the North East, the answer appears to be “not very much”. The top earning adviser area is Yorkshire but there is a strong showing from Scotland and whilst the traditional top areas – London and the South East show well, they are by no means dominant.

Impact of gender on salary, bonus and earnings

The adviser gender gap stands at 28%. This has to be considered too high. 18% of advisers are female and whilst there is some way to go in attracting females into the profession, there appears to be no reason why a female adviser should earn less than males. Looking beneath the total earnings figures we see that the gap for salaries is a little less at 13% but the bonus gender gap is 106%. All things being equal when assessing whether a pay gap is justified we can suggest that where the gap is reflected in bonus terms the earnings differential is more likely to be performance or business value related. Nevertheless we still have to ask how it is that bonuses for males are double those for females. One area to consider is the level of experience.

Impact of authorisation route

Advisers who are directly authorised earn over 15% more than advisers who operate within a network. The earnings results for network members will of course reflect the direct costs of the network. However, directly authorised advisers have compliance related costs to cover and potentially other costs including marketing or training. It seems unlikely that the authorisation choice itself drives net earnings, more likely that other firm characteristics including size are the major determinants.

Does size of organisation affect adviser earnings?

The chart below shows a clear advantage for advisers' earnings in firms with over 500 employees but below that there is no clear sliding scale.

Do independent advisers earn more than restricted advisers?

The Census shows a clear “no” – restricted advisers have a 31% advantage over independents. We have seen this before in previous Census findings.

Independent v Restricted by size of organisation

The chart on the right shows that the larger adviser firms are much more likely to be restricted. Our conclusion on earnings is that advisers tend to earn more in larger firms and larger firms tend to be restricted so restricted advisers tend to earn more than independent advisers. Tentatively we can conclude that a restricted proposition does not hamper an adviser, rather the extra support offered by a larger firm will tend to assist earnings.