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.