Clarification: The following numbers are indicative only. Pay data referenced below includes part-time employment and includes paraplanner salaries. For the purposes of this article, we have used Payscale to show a general theme of increasing salaries across the board.
In the past few years, many advisers have invested thousands in their education and development in the pursuit of professionalism.
The investment is a necessity to continue practising in the newly minted profession, but it also prompts the question: Will a wage rise follow?
All other things being equal, higher barriers to entry and ongoing development obligations are often associated with higher salaries. However, most advice businesses are grappling with hefty cost pressures as they wade through these uncharted waters. For this reason, some businesses may wait to reward staff.
Adviser Ratings took a look at the current state of affairs and a few of the key indicators suggesting advisers’ salaries are under upward pressure.
Where does advisers’ pay stand?
Data from PayScale shows the average adviser was earning just shy of $78,000 last month.
However, advisers with more experience were earning closer to six figures, PayScale showed. An adviser with 10-19 years’ experience was on an average $99,000, while an adviser with 20+ years’ experience was on an average $102,000.
Meanwhile, analysis from Striver in our Landscape Report shows the average graduate recruit was earning around $55,000 at the start of this year and Adviser Ratings data shows the average salary of an experienced full time adviser was $130,000.
The factors pointing to wage increases
The most obvious factor indicating wages need to rise is the supply and demand imbalance. Adviser Ratings analysis suggests the number of advisers in Australia will fall to 13,500 by 2023. At the same time, the pipeline of new talent is still looking bleak. Low supply will put upward pressure on wages.
Source: AR data
Secondly, the demand for financial advice is skyrocketing as Baby Boomers prepare for retirement. With fewer advisers to service an insatiable demand, salaries can go in only one direction.
Thirdly, increasing participation costs – such as for education and professional development – are pushing both new and existing advisers to demand higher salaries. These pressures are ballooning as more advisers complete their education and ethics requirements and recognise they are among just a few thousand competing in their profession.
Finally, analysis from our most recent Musical Chairs report shows advisers have been seeking stability in the past few months as they cope with the COVID-19 lockdowns in several states. As Sydney and Melbourne move to exit lockdowns, we expect further mobility in the advice market. Again, this will put upward pressure on wages, as businesses compete for talent, and advisers who don’t receive what they expect vote with their feet. See how state lockdowns have affected adviser movements in our next edition of Musical Chairs, due out later this month.
It’s worth reiterating that these wage pressures will cause headaches for many businesses that are trying to keep costs low through a difficult year. Some of these businesses may move to other forms of incentivisation to keep talent, such as flexible work arrangements.
However, with all signs pointing to a salary increase, for most advisers it will be more a matter of when than if.
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Comments15
"Dear Adviser ratings, You really opened up a can of worms here. Using payscale data was always going to get you in trouble, as the numbers seem quite off the mark for advisers and indeed many other industries too. But the essence of your article is correct. Why would anyone bother with the workload, the compliance regime, the labyrinth of rules, all for a modest salary. We advisers work hard, we protect our clients capital, improve their situation, follow the ASIC rules and for all this why shouldn't we be on a salary that is commensurate with the work and risks involved. That salary is not $80k. My note to other fellow advisers: hang in there just a bit longer... I really think it's going to get much better soon"
Julian 16:44 on 13 Oct 21
"When it comes to data, I reckon they are using regional and rural Australia in their stats, not just the cities, therefore I suggest salary ranges will reduce. Some people suggest moving on for an adviser with 10+years of experience, $80k per annum, regional NSW... I'm thinking so too."
Dan 10:29 on 07 Oct 21
"We appreciate all the comments in the discussion here. We've used Payscale data in the article to show a general theme of increasing salaries across the board. This also highlights the difference between Pay scale's data and our own, whereby our connection with practicing advisers shows the Average Australian Adviser's Annual Salary to be $130,000, much higher than what Payscale's data reflects and is in line with some adviser comments in this discussion."
Adviser Ratings 17:55 on 06 Oct 21
"Was made redundant last year just before Christmas, contemplated going out on my own. After speaking to a couple of licencees and crunching some numbers decided it was a mug's game. Luckily I found another job. But my salary hasn't moved in the last 11 years, and in fact it has gone backwards in actual dollars, let alone inflation. I am one subject off being "fully qualified" but I know that this doesn't mean a thing. I will have paid out over $15,000 to be classed as "professional" for the net return of nothing. If I could leave this industry tomorrow I would but location and ageism means I have to stay right where I am."
Eli 17:49 on 06 Oct 21
"Our Licensee fees for 2 offices with 5 Advisers have just increased from $87k pa to $219kpa. Fees will have to nearly double to cover this before anyone gets a pay rise! It’s simply ridiculous."
Phil 17:28 on 06 Oct 21
"I feel I'm overpaying that over qualified fellow with his 35 years experience and all his degrees...wonder if he'll take a redundancy? Yes - talking to and about myself again...."
Has Shoes 16:31 on 06 Oct 21
"A salaried planners wage isn't what his gross income is... obviously its plus super, plus dealer fees, Plus ASIC Levy, Plus PI, plus on-going training and support, plus PD days, plus CPD points, plus business resources such as technology, support staff, rent etc.... add 30-50% on top of their salary. Virtually impossible for anyone to start from scratch anymore and the uncertainty of buying a practice to start on your own is even more daunting. "
Anthony 15:59 on 06 Oct 21
"Where's the information on the survey group? plucking numbers out of thin air by the looks of it. Planners should be remunerated inline with other professionals i.e. Lawyers etc! "
Bill 15:52 on 06 Oct 21
"As this article explains , the number of advisers are diminishing , whilst the need for advice is growing . From my personal perspective of only being in this industry for 37 , which has evolved into a profession and now the past few years I have spent on education , learning and comply with Corps act , Fasea , and AFSL requirement s has placed so much emphasis within the new Realm which we have all embraced I find that it has caused so much pressure on clients to understand and to work within our requirements to ultimately work in their best interest and within my small fraternity and colleagues within my circle that clients will not be able to afford advice or the simple fact that many of my colleagues will no longer work in this profession in the coming years ! Very Sad from my perspective as the biggest pleasure I receive is helping people and this is becoming more and more difficult to provide this for the Australian public . I wish all the very best in these trying times ."
Frank Starvaggi 15:50 on 06 Oct 21
"Agree with previous comments re salary data - this looks way off the mark and highly suspect. Let's have details on the sample size, and qualitative makeup of the 'research'. "
Tony 15:42 on 06 Oct 21
"These numbers are way off the mark to what planners are asking. All are wanting 6 figures and not just $102,000. "
David 15:33 on 06 Oct 21
"Retail volumes will drop as advisers relinquish that market hence a drop in income due to the overkill in compliance regulations. New advisers will be overwhelmed servicing retail clients adhering to the regulation regime and the anxiety of the AFSL holders that they commit to administer these new rules Whole sale clients look to experienced advisers with many years on the clock to be serviced ."
Alexander Papas 15:25 on 06 Oct 21
"I would be shocked if any experienced advisers was earning the average of '$78,000' pa or less. If this is the case then do yourself a favour and move on. There are far less stressful occupations in that salary range. "
Fairy Land 15:16 on 06 Oct 21
"With all due respect you are talking about Salaried advisers who are paid by an employer. Wake up go to work knock off come home. Money there every week. Try being self employed like myself for 40 years how i would love to give myself a pay rise ! Get up go to work and keep working ? And deal with the red tape ASIC the running of the business and hope you have worked hard enough this week to cover costs. Whoever wrote this is not in the real world."
Ken 15:00 on 06 Oct 21
"What rubbish research is this? Where do you find financial planners with more than two years experience on under $100K? And you are trying to tell us the average is $80,000? Rubbish!"
Chris 14:53 on 06 Oct 21