According to the Bureau of Labor Statistics (BLS), personal financial advisors have a median pay of $94,170 per year.
According to Comparably, CERTIFIED FINANCIAL PLANNER™ or CFP professionals have an average salary of $121,000 while Wealth Managers have an average salary of $186,000. The statistics are for New York and San Francisco, respectively, where they’re most well-paid. The data for wealth managers also shows that the middle 57% makes between $111,000 to $280,000. This data shows that wealth managers have a high earning potential.
Additionally, your salary might differ based on various factors, including your payment structure, the size of assets under your management, and the performance fee you get from each client.
Wealth managers often focus on a handful of clients since they need to offer a comprehensive suite of services.
It’s common for wealth managers to charge based on an annual fee or a percentage of their client’s balance — or what’s called the Assets Under Management (AUM) structure. Considering that your clientele will consist of high-net-worth clients, it’s natural to expect a bigger fee from one client.
On the other hand, financial advisors are often not as involved. You might only need to check in with your clients a couple of times a year as a financial advisor. This allows you to take on more clients compared to wealth managers.
How much you make will depend on how you get paid. As a fee-only financial advisor, your only source of income will be from your clients. Depending on the pay structure, you might get paid a flat rate annually, hourly, or using the AUM model. On the other hand, fee-based advisors receive compensation from client fees, as well as commissions from specific investment products they’re affiliated with.