When it comes to industry benchmarking studies, there are a number that look at compensation for advisors, typical spending for advisory firms in various categories, and trends in growth and hiring. However, the recent “2015 Trends in Adviser Compensation and Benefits” study, jointly produced by the Financial Planning Association’s “Research and Practice Institute” and the industry trade publication Financial Advisor IQ, takes a unique look at some of these categories, providing an especially in-depth look at typical employee benefits in an advisory firm and current trends in hiring (including what kinds of positions firms are hiring for).
For instance, the FPA’s research shows that almost 80% of firms that offer ‘basic’ employee benefits like health insurance, also offer reimbursement for licensing and exam fees and a budget for professional education and development. However, ‘lifestyle perks’ like paid parking, health club membership, and telecommuting are still relatively uncommon.
Also notable in the FPA’s research was the ongoing rise of financial planning itself, as advisory firms look to deepen their solutions to compete against the so-called “robo-advisors”. In fact, more than 50% of firms report interest in hiring financial planning staff, from senior advisors to associate planners and even paraplanners – a growth trend we’re seeing within New Planner Recruiting as well.
Unfortunately, though, when it comes to compensation trends, the FPA’s study had a limited sample size that may have been too small for very accurate data – further muddled by inconsistent categorization of jobs that make it hard to rely on the average incomes that were reported. Nonetheless, the FPA’s recent “compensation” study is worth a skim, if only for the non-compensation data it provides. And fortunately, at least this year it’s free to all.