Financial Advisor Compensation Structures

Does anyone know what a typical compensation structure is for a new financial advisor who is not bringing a book with them? Typical grid rates for rookies, typical base salaries, whether a more seasoned FA at the firm sponsors you and takes a cut from your production (if so, how much, for how long), etc? For example, if entering into a program like these:

https://www.ubs.com/global/en/about_ubs/careers/wm...
https://www.ml.com/merrill-lynch-advisor/new-advis...
https://www.morganstanley.com/people/financial-adv...
Any advice or insights would be greatly appreciated.

Comments (4)

Feb 6, 2019

Usually $50-70k base for 2-4 years for your ramp up period (base depends on your location/experience/negotiation). If you're going at it alone, your grid number that you keep is typically 25-35% of revenue. If you are on a high producing team, this may be higher: 40-50%. This stat may be a bit misleading, but at UBS the average advisor produced $1.2mil last year and their grid was typically around 40%, so around $500k comp. New advisors without a book and without a team really face an uphill battle, but some will succeed!

    • 1
Feb 6, 2019

Thanks! This is very helpful. Seems like it makes a lot of sense to join a team given higher grid rate, but what are the downsides? Does the team take a portion of your comp? Do you have sense for what is typical comp structure for new FAs joining teams under those programs?

Feb 6, 2019

I've seen a few junior guys be on a team earning money as an "analyst" doing due diligence or quarterly reporting/updating numbers/presentations kind of role, while simultaneously building their book as well. The best case scenario is where it's a win win for both parties. An example of that is when you can specialize in 1 part of the team's business (marketing presentations for example) and help them with that and also have your personal book going at the same time. You pick up some extra cash, and it frees up some of their time. The downside is you might never make the full leap over to your book and just get comfortable with the analyst salary. The most recent numbers i've seen is a 65k base in a 3 year program where the production grid level is approximately 30-35% to start. So for example if you brought in $6mil a year by the end of 3 years you'd hopefully be around $180k production, getting about back up to your base comp by the time it disappears. Typical comp is they stay for a year or so and then jump to something else because they aren't producing enough revenue.

Most Helpful
Feb 6, 2019
Comment
    • 2

Pages