Significant salary increases across all levels of financial advice have been witnesses as a direct result of diminishing adviser numbers, increased client referrals and business exits, according to new research by Kaizen Recruitment.
According to the recruitment company’s findings, wealth management firms are going to great lengths to keep advisers, including upping their salaries by between $20 and $30,000 or in more extreme cases by $50,000.
Kaizen’s research shows that senior advisers with 5 to 10 years’ experience are receiving salaries of around $140,000 to $180,000, while those with 2 to 5 years’ experience are pocketing $110,000 to $140,000 per year.
Speaking to ifa, principal consultant at Kaizen, Warren Corston, said firms are aware that the pool of experienced, adequately educated and blemish-free advisers is shrinking, and are therefore doing everything they can to keep advisers that are considering a move.
“Many advice practices, small and large, need experienced advisers to service either an existing book of clients or as a method of scaling up the business and client base. In a tight market, experienced advisers benefit from choice,” Mr Corston said.
“Counteroffers from their current organisation certainly pushes salaries up, but also larger organisations that already have scale can and do offer higher salaries to attract talent,” he explained.
Specifically, Kaizen found that female senior financial advisers are in high demand, particularly as they only make up about 10 to 20 per cent of the industry and many larger wealth management firms have diversity quotas to meet.
“Overall, we have found the financial advice pool of candidates to be predominately male (~80 per cent), hence, many businesses are looking to balance out the diversity of their teams. This has meant that female advisers have more choice when it comes to their employer as it is not possible currently for every business to be able to meet a gender diversity target of 50/50,” Mr Corston said.
According to Adviser Ratings, as of January 2022, females only made up about 22 per cent of the industry.
Overall, Mr Coston explained, the advice market closely mirrors the wider economy where skilled employees are generally lacking.
“The overall number of registered financial advisers/planners has shrunk over the past couple of years only adding to this shortage,” he said.
Looking forward, Mr Coston advised wealth management companies to be mindful of different generation expectations and how to fulfill them.
Last week, Wealth Data reported that although there are 16,344 advisers currently on the Financial Adviser Register, a loss of more than 500 is expected following the recent results of the financial adviser exam. In fact, the industry is predicted to slide to 15,800 advisers.
Goodluck to them.
Money doesn’t grow on trees and their new employer will ensure that they get “Their pound of flesh” out of them.