Entering the field of financial advising can be lucrative, but earnings vary widely depending on factors like education, certification, firm, location and clientele. Experience is one of the most important drivers of financial advisor compensation, with veteran advisors typically able to bring home several times the earnings of newcomers to the field. Understanding the salary ranges for new advisors can help those aspiring to enter this field make informed decisions.
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Financial advisors are high earners compared to most workers. According to the most recent data from the U.S. Bureau of Labor Statistics (BLS), the median pay for personal financial advisors was $102,140 per year or $49.11 per hour. 1 That hourly rate is more than twice the $23.80 average of all occupations. 2
However, new advisors typically start out earning more modest sums. The BLS indicates that the lowest-paid 10% of financial advisors earned less than $49,990 per year. The lowest 25% of advisors, meanwhile, earned under $70,620. Using this BLS data, we can estimate the starting base salary for many new financial advisors at approximately $50,000 to $70,000 per year.
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Some new financial advisors can earn significantly more than the average. One way new advisors can increase their earnings potential is by obtaining professional certifications. Some of the most common certifications include:
Advisors who obtain credentials like these tend to command higher salaries, possibly 30% or more. They can also help you get more clients if you’ve started your own firm, showing your knowledge and ability. That’s not the only way to find new clients, though. Add new clients and AUM at your desired pace with SmartAsset’s Advisor Marketing Platform. Sign up for a free demo today.
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The industry an advisor works in can also significantly impact earnings. The highest-paying industries for new financial advisors, according to the BLS, include:
Location also plays a role. Advisors in northeastern states have the highest average salaries, according to a report from InvestmentNews. 6 The top-paying states are New York ($155,000), Connecticut ($144,100) and Massachusetts ($142,600). Those in smaller markets may begin at closer to $50,000 to $60,000.
In addition to base salary, new advisors may earn money through commissions, bonuses and profit sharing. For example, an advisor may receive a percentage of the management fees charged to clients. They may also receive bonuses for bringing in new clients or assets under management. A first-year bonus might range from $5,000 to $20,000 in compensation on top of base salary.
Employee advisors may also be compensated with a generous 401(k) match, paid health insurance that includes access to a Health Savings Account (HSA) with matching contributions and access to specialized sales training or business development programs. Some employers may offer additional benefits, including student loan and tuition assistance programs, or funds to cover the cost of obtaining a professional credential or securities license.
The job outlook for financial advisors is bright, relative to other occupations. The BLS has projected personal financial advisor employment to grow around 10% from 2024 to 2034. That’s much faster growth than the average 3% rate that’s expected for all other occupations.
Demographics reliably drive this trend. As more baby boomers retire, demand for retirement planning advice is expected to rise. And as 401(k)s replace pensions, more individuals will seek guidance on investing in these accounts.
With a few years of experience under their belt, advisors can increase their salaries substantially. The median pay ranges from $150,000 to $281,000, depending on experience and industry, according to Glassdoor data. The median advisor pay across all levels of experience is $201,000 per year. 7
Experience alone can increase earnings, but advisors can also take proactive steps to boost income. In particular, attracting new clients and bringing in more assets to manage are key factors in boosting pay over time.
New financial advisors can expect to earn $50,000 to $70,000 a year when starting out. Experience, credentials, firm, industry, location and the types of clients served all impact pay. While starting salaries may seem modest, the potential to grow earnings over time makes financial advising a lucrative long-term career choice.
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All articles are reviewed and updated by SmartAsset’s fact-checkers for accuracy. Visit our Editorial Policy for more details on our overall journalistic standards.
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