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Compensation Review: What Salary To Expect As Financial Advisor

If you’re thinking about beginning work in the finance industry, your salary as a financial advisor will be determined by a number of different factors.

Those who come right out of a university and start a career can expect to command a bit less than their peers who have worked in the industry for several years. Often, you will find that a financial advisor salary is determined by the industry of employment, as well as the area of the country where you’re employed.

Working as a Financial Advisor

Typically, financial advisors sit down with their clients to directly talk about the personal financial goals of a client or their company. Advisors must explain the types of services they provide and ensure clients that their money is well cared for.

Clients should feel safe and comfortable knowing that their personal wealth is secure with an advisor and won’t feel at risk when recommendations are made for investments, or if decisions are made by advisors on their clients’ behalf. These plans might be mapped out over a short period or longer terms, depending on the commitment level of the client.

While a lot of financial advisors have diverse knowledge, you may end up focusing on one particular area or industry, such as retirement or fraud prevention.

Financial advisors are certified or licensed to purchase insurance, stocks, bonds, and annuities. If their clients give them explicit permission, advisors can take the initiative and make decisions with stocks currently held by the client, buying or selling as they see fit.

financial advisory

Financial advisors spend a significant amount of time promoting and selling their services, expanding their client base, and increasing their income in the process. They can hold presentations and seminars to recruit potential clients while simultaneously explaining the benefits of hiring a financial advisor.

Becoming a financial advisor requires you to attend a college or university and earn a bachelor’s degree. There isn’t necessarily a specific field to choose for a major, but you will certainly benefit from studying economics, accounting, finance, or math.

With that said, dedicated programs in financial planning are widely available and will prepare you for a career as a financial advisor with courses specifically tailored for dealing directly with clients and their finances.

To earn success as a financial advisor, you’ll need to have excellent people skills – you won’t want to scare off any potential clients with an awkward encounter during your first meeting! Expertise in math is a must, as numbers are going to be in your workplace every single day, and you’ll need to understand how to manipulate data and formulas when making transactions. You’ll also need to be able to analyze the personal financial data of your clients, and when you are licensed to make decisions, figure out how to maximize an investment with your history in finance.

Financial advisors in securities and commodity contracts: $133,910

Financial advisors in grantmaking and giving services: $127,470

Financial advisors in nondepository credit intermediation: $113,140

Financial advisors in management of companies and enterprises: $111,910

Financial Advisor Salary Information

So, now that you know how to become a financial advisor and what skills are required for the job, just how much can you expect to make when you start a career? The answer will probably please you – financial advisors command quite a salary.

As of May 2018, the average annual wage for a personal financial advisor in the United States was $124,140. Naturally, this salary will fluctuate depending on the specific industry where you find yourself employed. Take a look at some of the variations in industry salaries for financial advisors below:

Financial advisors in securities and commodity contracts: $133,910

Financial advisors in grantmaking and giving services: $127,470

Financial advisors in nondepository credit intermediation: $113,140

Financial advisors in management of companies and enterprises: $111,910

financial data on tablet

As you can see above, the highest paying financial advisor salary falls under the umbrella of security contracts. The job of connecting financial buyers and sellers together can involve extremely high-dollar transactions, which explains the commanding average salary for financial advisors in the industry.

In the case of companies and enterprises, financial advisors will be in demand because of the high number of transactions and employees involved in a larger enterprise or corporation. The more potential accounts to deal with, the bigger the need for a financial advisor, and with it, the potential to command a bigger salary, so it’s a win-win!

Your salary as a financial advisor will also differ depending on where you find employment in the United States. Let’s take a look at the highest-paying financial advisor positions by state:

Financial advisors in New York: $166,200

Financial advisors in California: $141,100

Financial advisors in Connecticut: $137,120

Financial advisors in the District of Columbia: $135,770

Financial advisors in Maine: $134,380

Looking at these numbers, it shouldn’t come as a big shock that New York is, by far, the highest on the list of states that pay financial advisors well. The amount of money circulating through Wall Street is immeasurable at any given moment, and financial advisors are needed at all times to keep track of the constant activity happening on the stock market throughout the business week.

California is next on the list, which makes perfect sense, given the number of celebrities wanting to protect their financial assets while maintaining multimillion-dollar homes in the state.   

Financial Advisor Employment Numbers

macbook and iPhone

Okay, so New York and California have the highest financial advisor salary on each end of the country, but how likely are you to be able to secure a job in these areas? Let’s find out by listing the states with the highest employment number of financial advisors:

Financial advisors in New York: 28,000

Financial advisors in California: 24,790

Financial advisors in Florida: 12,600 (average salary of $126,700)

Financial advisors in Texas: 11,530 (average salary of $111,640)

Financial advisors in Illinois: 10,650 (average salary of $121,750)

Unsurprisingly, the employment numbers directly correlate to the high salary for a financial advisor in New York and California. While Florida doesn’t rank in the top five highest annual salaries for financial advisors, the large retiree population in the Sunshine State attracts a high number of financial advisor positions. Those who decide to spend their later years in Florida after the end of a long career will need the expert advice of someone who understands how to keep funds secure for retirement savings and pension plans.

A state the size of Texas, home to several major metropolitan areas (Dallas, Houston, and Austin), will always see the need for financial advisors. Chicago is a thriving city for many demographics, and those fresh to the city as well as Chicago natives can find the need for financial advisors during different parts of their lives.

When we adjust the numbers to look at employment density within a given state, you can see the potential for a great career in a few other locations:

Financial advisor positions per thousand jobs in New York: 3.04

Financial advisor positions per thousand jobs in Connecticut: 2.89 (average salary of $137,210)

Financial advisor positions per thousand jobs in Massachusetts: 2.08 (average salary of $109,370)

Financial advisor positions per thousand jobs in Illinois: 1.80

Financial advisor positions per thousand jobs in Missouri: 1.79 (Average salary of $89,710)

We’ve discussed the large areas of New York City and Chicago, but what about the other three states on this list? Connecticut, Massachusetts, and Missouri all contain extremely busy financial sectors in comparatively smaller locations; Connecticut has Bridgeport, whose population density is comparable to that of the Los Angeles metro area.

In the case of Massachusetts, Boston’s financial district rests in the heart of the historic city, and financial advisors would feel right at home in the busy, vibrant part of the commonwealth of Massachusetts. Meanwhile, Missouri is home to St. Louis, one of the bigger cities in the center of the United States, and whose population is confined to a larger metropolitan area surrounded by sparser suburban sections.

Financial Advisor Characteristics

lady holding bitcoin

Now that you know what kind of financial advisor salary to expect, you might also ask yourself: what type of person becomes a financial advisor?

Earlier, we discussed the need for you to be excellent with numbers, and skilled with interpersonal relationships. Ideally, you’ll study finance or math in a university, but a deep understanding of psychology is just as beneficial as knowing to how program algorithms into a computer. For a successful career as a financial advisor, you want to be just as in touch with your clients’ needs as you are with market trends and economic forecasts.

Financial Advisor Job Forecast

As attractive as those financial advisor salary numbers are, they don’t mean a whole lot without a steady potential for job growth. Fortunately, you’re in luck, because a 15% increase is expected for the number of financial advisor positions in the United States, a number much higher than the national average for all occupations.

In the coming years, a huge number of baby boomers will be retiring, and with retirement comes the need to settle down and secure a financial future for the family. On top of this, the country is seeing personal retirement accounts rise to prominence as an added benefit of a full-time career. These aren’t as transparent as pension plans, and the use of a financial advisor to accurately utilize and plan a retirement account will become more essential as time continues.

Even though technology has replaced the human element in many industries, nothing will ever replace another person who has a knack for psychology and can relate that knowledge to the emerging trends seen in the marketplace.