Financial planner salaries may have risen since 1999, but it is bonuses, equity and commissions from selling products that have sent them skyrocketing on the back of strong economic conditions.
An adviser who brings in $1 million worth of fees may get a whopping $100,000 bonus on top of a $200,000 wage packet, eJobs recruitment specialist Trevor Punnett says.
A majority of experienced planners will probably have a $90,000 base salary and earn $20,000 to $30,000 in bonuses, Punnett says.
In 1999, Investor’s Advisor reported that planner salaries started at $60,000.
Today, the starting figure is from $70,000 to $100,000, including bonuses, equity and commissions, according to statistics from eJobs.
“So what if they have been going up that much?” Punnett says.
“We have been living in very buoyant times.
“Perhaps it could be argued that over a four-year period [of superannuation changes and the equity market rally], it should not have been too difficult for employers to accommodate.
“One boutique in Coffs Harbour [in New South Wales] is offering $150,000 [per annum] to $300,000, asking for just 12 months’ experience and PS146.”
In 2000, a report by human resources firm Morgan and Banks forecast the industry would need to adapt to the needs of generation X employees, whose particular demands would challenge principals accustomed to dealing with their baby boomer colleagues.
It also predicted supply within the industry would dry up.
Enter Western Australia, the booming mining state with massive nickel mines, huge iron ore reserves and a gargantuan oilfield, but a limited supply of financial advisers.
Perth-based Integro Private Financial Consulting founders Troy MacMillan and Justin Gilmour could not find anyone to hire in the state.
They made a Sydney planner a big offer and the promises of an ever-sunny WA lifestyle.
“We would not only offer bonuses depending on their personal key performance indicators, but there is also the possibility of up to 15 per cent of the revenue of the business on top of their salary,” Gilmour says.
Boutique Sound Life Financial Services, based in Albany, WA, sponsored its South African born practice manager, Kerry Carter-Brown, to become a resident.
“What we find the advantage of that is that you have some continuity with the person because they have to commit for at least three years to the business,” Sound Life principal Richard Duffield says.
One thing that has not changed is the salary for junior paraplanners, which has remained flat in the $40,000 to $45,000 range since 2004.
But a salary for a paraplanner with an Advanced Diploma of Financial Planning with two years’ experience has risen from the $40,000 to $60,000 range to the $70,000 to $90,000 range.
However, there is one issue plaguing practices and principals today, generation Y.
“Generation Y want it now, they want to progress very quickly. They will leave a job at the drop of a hat if a better offer is made,” Punnett says.
The young guns of the industry may not even leave because the employer is bad necessarily, but to simply explore.
“It depends on the behaviour style of the candidate. If a candidate is an admin supporter they are more of a career paraplanner and they are more likely to stay,” Punnett says.
“But if they are a ‘driver promoted style’, then they will want to progress into advising or clearly if that need or desire is not filled, they will leave.”
But many planners and paraplanners may have been taking things for granted, according to Financial Recruitment Group national manager of research and consulting Lena Coats.
“It [taking things for granted] only stands to reason when times are good, as was the case over the last 12months,” Coats says.
“However, it may not be the same story over the next 12 months due to the uncertainty within the financial markets.”
However, it still looks to be another golden year for financial planners.
“The demand for financial planning professionals will always be high due to the fact that more people than ever before will have the money to invest through superannuation and are living longer,” Coates says.
“Also, a lot of financial planners are baby boomers and are planning to exit the business over the next one to five years.
“So therefore they will need replacing, which is where good succession planning will be required.”
