Financial Advisor Base Pay Drops in Q1
Financial advisors saw one of the biggest drops in base pay in the first quarter among many professions — and robo-advisors are to blame, according to news reports.
Advisor base pay had grown from $51,300 in 2017 to $54,100 in 2018, but it dropped to $53,196 as of this April, FA magazine writes, citing statistics from employment website Glassdoor.com.
Daniel Zhao, Glassdoor’s senior economist, tells the publication that it’s in large part due to pressure on advisor wages from automated investing services, which are particularly popular with younger Americans.
Zhao also attributes the healthy pay growth in early 2018 in part to confusion about the Republican tax overhaul, according to FA magazine.
Advisors can take comfort that it’s not just their salaries that have stalled recently.
"The decrease in pay for financial advisors is in line with sluggish pay growth for many other white-collar professions, from attorneys to marketing managers,” Zhao tells the publication. “Lately, the fastest growth in pay has been at the bottom of the income spectrum for workers like cashiers, bank tellers and bartenders.”
And Zhao doesn’t believe robos will ever replace human professionals, telling FA magazine that “the outlook is still bright for financial advisors.” After all, advisors will benefit from the imminent $48 trillion generational wealth transfer, and robots will not be able to replace humans when it comes to “non-automatable skills like relationship building,” he tells the publication.
“The industry will certainly evolve over the coming years so the opportunity will be there for advisors who can adapt quickly and leverage new technology," Zhao tells FA magazine.
What’s more, among the 271,900 personal financial advisors in the U.S., the annual median salary is $88,890, according to the CFP Board of Standards, the publication writes.