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Payouts Fall for Reps at Most Top-10 Paying BDs

June 21, 2017

Most of the top-10 broker-dealers by payout have cut average payouts in the past year, according to InvestmentNews.

Kalos Capital’s reps earned on average $279,136 in 2016, a 4.8% drop from 2015, according to the publication, which compiled the numbers from data provided by the firms. Triad Advisors also paid their advisors less in 2016. The average payout was $288,736, or about 4.3% lower than in 2015, InvestmentNews writes. Likewise, average payout at Founders Financial Securities fell 4.3% to $321,663 in 2016, from $335,982 in 2015, according to the publication.

Only a handful of firms raised their average payout from 2015 to 2016. Ahead of the pack is Summit Brokerage Services, whose advisors got paid $285,898 on average last year, or 19% more than they did in 2015, according to InvestmentNews. The Strategic Financial Alliance raised average advisor payout 7.3% to $348,529, the publication found. Prospera Financial Services boosted its advisor pay by 10.1% from 2015, meanwhile, with the average rep earning $381,432 in 2016, according to InvestmentNews.

Even most firms in the top five, however, cut advisor pay. Average payout fell 10.6% at Spire Investment Partners, to $387,985 in 2016 from $434,000 in 2015, the publication writes. And advisors at Geneos Wealth Management earned on average $408,042 in 2016 – a 6.5% drop from the year prior. Commonwealth Financial Network’s reps earned $461,217 on average in 2016, just 1.1% less than they did in 2015, according to InvestmentNews. And average payout per advisor essentially remained flat at Wells Fargo Advisors Financial Network, dipping just 0.4%. The $469,101 they earned in 2016 kept Wells Fargo network FAs firmly at the top of the ladder, according to the publication.

RIAs, meanwhile, are getting creative in how they lure advisors when competing with more well-heeled rivals, the Wall Street Journal writes. For instance, when looking to bring on another advisor, Taylor Schulte, chief executive at Define Financial in San Diego, couldn’t match the incentives and salary offered by wirehouses and better-established RIAs, he tells the paper. But he was instead able to lure the right candidate by offering him compensation tied to the firm’s gross revenue, according to the Journal.

Despite a short-term pay cut, the advisor saw potential for growth in Schulte’s firm that would be tied directly to how much he put into the job, Schulte tells the paper.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.
  • To read the Wall Street Journal article cited in this story, click here.