About three-quarters of advisory firms surveyed recently said they plan to hire new employees this year, and of those hiring, 41 percent said that they’ll be filling new positions, up from 30 percent seeking to hire for new slots last year.
According to a recent study of hundreds of wealth management organizations, the biggest emphasis will be on expanding the ranks of firms’ advisory teams.
Technical specialists that support an “expanded value proposition” will be the second most commonly sought hires, according to the new Investment News/Moss Adams Adviser Compensation & Staffing Study. Participation was open to advisory firms operating since January 2010, with a minimum $100,000 in revenue last year.
Only about 5 percent of the firms that responded said that they expect to lay off employees this year, according to the survey, which reflects the views of some 600 advisors responding between April and June of this year.
Competition for Professionals and Tech Specialists is Driving up Compensation
Meanwhile, competition for professionals and technical specialists is driving up the compensation for such roles.
Roles with the largest base salary increases from 2007 to 2011, according to an Investment News breakdown included:
- Estate specialists, with $101,577 in estimated 2011 salary versus $64,992 in 2007,
- Tax specialists, with $85,000 in 2011 salary versus $64,992 four years earlier, and the roles of:
- CEO, president or managing partner, with 214,000 in 2011 salary versus $135,000 in 2007,
- Insurance specialists, with $56,900 in 2011 salary versus $40,000 in 2011.
Among those who saw the largest payment declines were titles including:
- Director of sales, with $92,914 in 2011 salary versus $137,500 four years earlier, and:
- Manager of client services, with $55,000 in 2011 pay versus $65,000 in 2011.
Whereas salaries are rising faster than incentive pay in the most competitive job categories, incentives for all levels of employees-driven by tangible performance metrics assigned by job function-are also expected to rise in 2011 and beyond.
Benefits Packages Becoming More Competitive As Well
Benefits packages, which advisory firms offer their employees, are also expected to become more competitive going forward, the survey says, though size matters on this front.
Investment News reports that based on its survey, 92 percent of all advisory firms offer benefits, “although only 49 percent of the smallest firms-those with $100,000 to $250,000 in revenue-offer them.”
Most firms are making generous premium contributions to health insurance, however. A total 83 percent of those polled indicated they provide employee health insurance, and 82 percent provide that coverage to workers’ families.
Retirement plans are also common at financial advisory practices. Most of those with at least $500,000 in revenue provide a defined-contribution plan, for instance.
“Sixty-three percent of those with $500,000 to $1 million in revenue provide these benefits, and about 91 percent of those with more than $5 million in revenue have a DC plan for their staff,” Investment News reports, adding that profit-sharing plans are less common-only about 40 percent of large firms with over $5 million in revenue now offer them, and only 35 percent of practices in the $500,000 to $1 million revenue range do likewise.