Salaries of financial advisors are rebounding after a soft 2008, according to a new survey.
The survey of about 800 financial advisors by the College for Financial Planning and research firm Cerulli Associates found that the average earnings of financial advisors rose to $215,345 from $195,394 in 2008. Although average earnings were reported at $232,995 in 2006 and $283,079 in 2007, the 2009 findings are notable given the poor financial market conditions in late 2008 and early 2009.
Advisors indicated they value education more than ever. Eleven percent more advisors listed education as a key driver of success than a year before (49 percent in 2009, up from 38 percent in 2008), the biggest increase of any category. Interpersonal skills and client referrals topped the list.
The survey also found a shift toward fees and away from commissions. More than half of the respondents said they receive greater than half of their compensation from fees. Twenty-six percent were fee-only (more than 90 percent from fees) and another third (30 percent) were fee-based (between 50 and 90 percent from fees).
Advisor allocations to money markets and cash have nearly doubled in the past year. However, the greatest number of advisors plans to increase their usage of equity mutual funds and exchange-traded funds in the coming months, pointing the way to a road to recovery for asset managers and other product providers.
Clients are demanding more comprehensive plans, according to the respondents. About 36 percent of the advisors said their clients are receiving comprehensive written plans. Another 46 percent said clients receive modular plans, both written and unwritten. Advisors plan to increase the number of clients receiving comprehensive plans to 46 percent of their client base.
Nearly two-thirds (65 percent) of advisors reported being satisfied with financial planning as a career choice. The elements of financial planning that advisors found most satisfying were interacting with clients and working with clients to solve problems and meet goals.
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