Payscale.com and Salary.com are not accurate benchmarks for independent advisors and their Next Gen employees.
When the Next Generation needs an answer they Google it. So it’s not surprising to me that they have turned to human capital Web sites such as Payscale.com and Salary.com to get quotes on what they “should” be getting paid by their independent advisory firm owners. This month, after a slight bombardment by firm owners asking me if I believed the ranges were accurate, I decided to do a little study of my own.
I went to Payscale.com and benchmarked the pay range for an “Associate Advisor.” Payscale told me that the median base salary is about $57,000. Based on the basic job description they gave for an “Associate Advisor” it would be comparable to a “Support Advisor or Paraplanner” in the “2009 FA Insight Study of Advisory Firms: People and Pay” which shows a median base salary of $47,000. Additionally, if I went to Salary.com and searched for “ Associate Advisor” the job title does not exist. But a comparable title based on the description is a “Financial Analyst” which listed the median base salary as $58,000. When testing other similar cases, even the job title “Financial Planner” (i.e., Lead Advisor) my results still showed an inflated difference of 16% to 22% higher than the ranges of comparable industry studies.