The need for financial advice may be exploding, but the base pay for advisors actually shrunk in the first quarter, according to new statistics from Glassdoor.com
In fact, financial advisors saw the biggest decline in base pay among all jobs tracked by Glassdoor.com, down 3 percent to $53,196 in April. (Glassdoor's Job Market Report can be found here: https://www.glassdoor.com/research/job-market-report/united-states/.)
While consumer use of financial advisors is up significantly, a dramatic increase in automated investing services is putting pressure on wages, said Daniel Zhao, Glassdoor's senior economist.
"The decrease in pay for financial advisors follows strong pay growth in early 2018, possibly due to a temporary bump in Americans looking to navigate the effects of the tax cuts,” Zhao told Financial Advisor Magazine.
“On top of that, the explosion of robo-advising has increased competition for financial advisors, especially among younger Americans who are used to being able to manage their lives online,” Zhao said.
Consumer use of financial advisors increased significantly, from 28 percent in 2010 to 40 percent in 2015, with seven in ten consumers who seek out an advisor indicating they work with a certified financial planner, according to data from the CFP Board of Standards.
Broker-dealers and banks like Fidelity and Charles Schwab that offer financial advice have answered that demand by dramatically ramping up the number of advisors they employ.
Demand and pay have been a magnet, attracting more professionals to the field. Now, there are about 271,900 personal financial advisors in the U.S. with an annual median salary of $88,890, according to the CFP Board.
The career remains a desirable position for people coming out of college because it commands a high starting wage. But that doesn’t mean it is immune to base pay declines. Glassdoor found that after rising to $54,100 in 2018 from $51,300 in 2017, average advisor base pay fell to $53,196 in April.
How did financial advisors fare versus other occupations?