What Financial Advisors Made In 2019 And What They’ll Make This Year
Forget about robots enticing your clients with promises of good enough performance to justify charisma-free service. Fee compression in the wealth management business turns out to be mostly a myth.
That’s the good news. But the $100,000 question revolves around where YOUR income is going and how well it compares to what competitors are charging.
Because as it turns out, it’s a good time to be a financial advisor. People are flooding into the industry. Despite the robo revolution, more people are making more money here than ever.
According to the Bureau of Labor Statistics (BLS), the field is expected to grow seven percent between 2018 and 2028--faster than the average of five percent experienced in most fields.
After all, Baby Boomers, those born between 1946 and 1964, are retiring at a staggering rate (approximately 10,000 per day).
How Much Do Financial Advisors Make?
The median pay for financial advisors was $88,890 per year with the average pay skewing upwards to $121,770 -- according to data released by the BLS’s Occupational Employment Statistics for May 2018. That’s only a minimal down tick compared to the numbers from May 2017, when financial advisors earned an average of $124,140.
But there’s a lot of variation. The lowest paid 10 percent of financial advisors earned less than $41,590, while the highest 10 percent earned more than $208,000.
Overall, however, there’s mostly good news. Just a few years ago, many were concerned technological unemployment would consume financial advisors. The rise of artificial intelligence in finance such as robo advisors threatened to displace thousands of workers.
As it turns out, technology has ended up being complementary to advisors, allowing them to concentrate more on their clients and services.
The Future Is Bright
Thanks to the aging baby boomer generation, financial advisors are now more relevant than ever. More and more boomers need planning advice from personal financial advisors, and longer lifespans mean they’ll need help when it comes to figuring out how to make their finances last longer.
The number of people needing advice on their retirement plans is only expected to go up. According to a survey by CIT Bank, less than one out of five Americans said they were saving enough to meet their overall savings goals. In fact, most Americans are either not saving nearly enough money or are even worse off.
Financial advisors are in a great position to help people and as the field continues to grow, those positioned in the right places and right fields can expect their incomes to remain high.
Location Is Huge
If you’re thinking about the best place to set up an advisory office, the five states with the highest average salary are New York ($164.3K), District of Columbia ($158.5K), Wyoming ($135.3K), Maine ($135.2K), and North Carolina ($134.9K).
What’s the allure? DC and NYC have high concentrations of wealth. So do Wyoming and Maine per capita: there aren’t a lot of people in these states (I have managed to live in both) but there’s a statistically high proportion of millionaires here. North Carolina is the Research Triangle.
Meanwhile, the five states where advisors make the least are Oklahoma ($74.3K), Puerto Rico ($76.1K), South Dakota ($77.5K), Hawaii ($81.7K), and Vermont ($85.2K).
If you look at how wages have changed per state over the last few years, you get a slightly different picture. Not all states are trending upward, with many states actually reporting that financial advisors’ salaries took a hit between 2016 and 2018. Below is a chart that shows the annual mean wage for personal financial advisors in 2015, 2016, 2017, and 2018.
|
State |
Average Annual Wage - 2018 |
Average Annual Wage - 2017 |
Average Annual Wage - 2016 |
Average Annual Wage - 2015 |
|
Alabama |
$117,350 |
$124,240 |
$125,640 |
$122,580 |
|
Alaska |
$93,530 |
$99,910 |
$104,460 |
$106,400 |
|
Arizona |
$107,160 |
$103,130 |
$104,210 |
$81,760 |
|
Arkansas |
$96,600 |
$103,880 |
$104,410 |
$95,040 |
|
California |
$128,730 |
$141,100 |
$143,570 |
$130,510 |
|
Colorado |
$103,540 |
$118,470 |
$115,580 |
$113,070 |
|
Connecticut |
$131,280 |
$137,120 |
$133,210 |
$130,780 |
|
Delaware |
$126,880 |
$124,480 |
$123,680 |
$112,600 |
|
District of Columbia |
$158,460 |
$135,770 |
$135,130 |
$120,850 |
|
Florida |
$122,840 |
$126,700 |
$123,690 |
$119,350 |
|
Georgia |
$121,420 |
$115,880 |
$121,560 |
$116,700 |
|
Hawaii |
$81,700 |
$84,390 |
$79,610 |
$97,280 |
|
Idaho |
$104,640 |
$104,890 |
$100,620 |
$97,080 |
|
Illinois |
$126,640 |
$121,750 |
$116,110 |
$108,380 |
|
Indiana |
$111,330 |
$107,000 |
$104,710 |
$100,510 |
|
Iowa |
$105,540 |
$91,880 |
$95,480 |
$78,270 |
|
Kansas |
$93,720 |
$100,730 |
$115,870 |
$127,280 |
|
Kentucky |
$85,470 |
$91,760 |
$89,830 |
$84,840 |
|
Louisiana |
$92,300 |
$93,600 |
$95,150 |
$96,120 |
|
Maine |
$135,170 |
$134,380 |
$142,200 |
$131,260 |
|
Maryland |
$110,080 |
$105,150 |
$108,940 |
$102,140 |
|
Massachusetts |
$128,140 |
$109,370 |
$102,580 |
$130,200 |
|
Michigan |
$102,010 |
$114,210 |
$108,920 |
$99,730 |
|
Minnesota |
$99,490 |
$109,250 |
$108,820 |
$110,630 |
|
Mississippi |
$102,820 |
$100,280 |
$95,590 |
$84,930 |
|
Missouri |
$85,830 |
$89,710 |
$103,280 |
$108,660 |
|
Montana |
$102,730 |
$103,890 |
$113,450 |
$127,210 |
|
Nebraska |
$85,890 |
$92,340 |
$109,110 |
$121,700 |
|
Nevada |
$108,540 |
$116,300 |
$121,290 |
$106,340 |
|
New Hampshire |
$105,010 |
$114,190 |
$138,320 |
$123,200 |
|
New Jersey |
$127,150 |
$127,220 |
$131,460 |
$122,290 |
|
New Mexico |
$133,500 |
$127,350 |
n/a |
$134,270 |
|
New York |
$164,260 |
$166,100 |
$154,900 |
$148,450 |
|
North Carolina |
$134,860 |
$125,240 |
$113,470 |
$115,030 |
|
North Dakota |
$100,360 |
$93,890 |
$95,400 |
$83,480 |
|
Ohio |
$102,300 |
$109,640 |
$112,320 |
$104,830 |
|
Oklahoma |
$74,340 |
$82,750 |
$83,360 |
$85,200 |
|
Oregon |
$117,730 |
$114,150 |
$113,830 |
$93,880 |
|
Pennsylvania |
$109,250 |
$117,510 |
$119,140 |
$126,970 |
|
Puerto Rico |
$76,090 |
N/A |
N/A |
N/A |
|
Rhode Island |
$112,430 |
$132,990 |
$127,380 |
$118,420 |
|
South Carolina |
$89,830 |
$94,090 |
$109,370 |
$94,490 |
|
South Dakota |
$77,490 |
$83,530 |
$82,540 |
$80,330 |
|
Tennessee |
$89,960 |
$97,650 |
$101,630 |
$108,480 |
|
Texas |
$110,820 |
$111,640 |
$115,350 |
$107,260 |
|
Utah |
$88,440 |
$95,980 |
$87,650 |
$96,960 |
|
Vermont |
$85,150 |
$76,050 |
$71,530 |
$71,760 |
|
Virginia |
$121,250 |
$123,730 |
$124,360 |
$120,330 |
|
Washington |
$109,870 |
$106,370 |
$112,860 |
$121,320 |
|
West Virginia |
$95,210 |
$88,120 |
$93,730 |
$72,690 |
|
Wisconsin |
$115,820 |
$106,250 |
$108,680 |
$91,060 |
|
Wyoming |
$135,340 |
$118,620 |
$115,610 |
$108,620 |
As we can see from the chart, many states saw a large drop in income from 2017 to 2018. California fell from $141,100 per year to $128,730, Rhode Island fell from $132,990 to $112,430, and Minnesota dropped from $109,250 to $99,490.
Meanwhile, advisors in other states saw significant income growth. In Wyoming, advisors went from earning $118,620 in 2017 to $135,340 in 2018. That’s mostly the shale boom.
Massachusetts advisors went from earning $109,370 to $128,140, and those in the District of Columbia saw their average wages balloon to $158,460 from the $135,550 which they earned in 2017.
Last year, Howmuch.net, a financial literacy website, released a map titled, “Visualizing How Much Financial Advisors Earn in Each State”. The map shows the huge differences between salaries in different states across America in 2017. The color-coded map reveals the areas of the U.S. where financial advisors are most prosperous. From a quick glance, it is obvious that the highest paid financial advisors live in the Northeast and Mid-Atlantic regions, while the Midwest has the lowest average payment overall.
What Services Should Financial Advisors Focus On?
While location certainly makes a big difference when it comes to financial advisors’ incomes, so does their industry concentration. According to the latest data from the BLS, of the industries that financial advisors are most often employed in, those concentrated in the Securities, Commodity Contracts, and Other Financial Investments and Related Activities fields are making the highest mean salary ($129,950). The next most prosperous sector is Management of Companies and Enterprises ($117,210). Below, find a chart showing the mean salaries for the industries that employ the most financial advisors.
|
Securities, Commodity Contracts, and Other Financial Investments and Related Activities |
$129,950 |
|
Credit Intermediation and Related Activities (5221 And 5223 only) |
$102,850 |
|
Agencies, Brokerages, and Other Insurance Related Activities |
$84,640 |
|
Management of Companies and Enterprises |
$117,210 |
|
Accounting, Tax Preparation, Bookkeeping, and Payroll Services |
$99,610 |
Where Do YOU Stand?
With an aging population that needs more and more help with financial guidance, Financial Advisors will continue to find themselves in a good place for years to come. The industry will remain competitive, but overall growth in jobs and salary over time are expected.
But if you’ve let the headlines dictate your professional posture, you might be missing out. Your competitors aren’t slashing fees to stay ahead of the robots. You shouldn’t either.