The annual Moss Adams Studies are always revealing, and this year’s recently released Compensation Study was no exception. The pay scale for non-owner professionals is starting to skyrocket, long overdue in my view. According to Moss Adams, compensation for non-owner lead advisors has jumped 41% in the past two years. And I expect we’ll see more of the same in the next several years, at least.
It’s no secret that advisor comp has been driven up recently by increased demand for younger planners: It seems that older owner advisors have realized that they can grow their firms faster with professional leverage–and that good, junior advisors who can eventually take over make their firms much more valuable to prospective buyers.
For some years now, firm owners have been underpaying young professionals, as evidenced by the high turnover rate among NextGen planners, and by the much higher comp that young professionals can command in other professions such as accounting and securities sales. Hopefully, the tide of rising wages will help stop the brain drain of smart young planners leaving the profession.
I believe the next big thing for larger advisory practices–and those firms who want to be large–will be a boom in effective training for these young professionals. Today, if they get any training at all, it’s largely focused on some professional disciple such as portfolio management or writing financial plans. There’s nothing wrong with that, as far as it goes. But most professionals wait years until they start to get such training, and even worse, it’s in areas with relatively low impact on the success of their firms. To truly jumpstart junior advisors to start making a maximum impact on firm growth and revenues within their first year, owner-advisors need to start training them on firm operations–every aspect of their firm’s client service and the technology used to provide that service–from day one. This is essential training for the advisory industry’s essential resource.
I would like to hear from all you young planners out there about your training and how to improve upon those programs to help you grow.