Are You Being Paid Fairly?

By Jim Perhacs, Managing Director, Chief Operating Officer

The wealth management industry is changing, and the old ways of doing business are quickly being replaced. New regulations, fee compression, and more emphases on their clients are driving financial advisors toward independence. Is pay part of the equation?  

Know your worth

According to Charles Schwab, 7 out of 10 advisors have increased their revenue since going independent. Considering most wirehouses pay between 30-40%, this kind of uptick comes as no surprise. In fact, most advisors can expect to receive an 80-90% payout for their work after they make the switch to independence. 

Find your best fit

There are different ways to build an independent business, and payouts can vary depending on the size of your book and the structure you select.  As you begin your journey, it’s important to ask yourself these essential questions:

  • Do you want to keep your commission-based business, or do you want to charge fees?  Some advisors choose to do both!  Under the hybrid structure, you are dually registered to conduct both advisory and brokerage business.
  • If you choose a fee-based business model, how do you want to charge your clients? Your options are flexible, but most independent advisors charge a percentage of their clients’ assets.  Few offer flat fee structures these days.
  • How much outside support do you want?  The highest payouts generally go to advisors with large books of business and less need for ancillary services such as pre-paid marketing support and business administration.  On the other hand, jumping into another employee model at an existing RIA firm allows you to leverage a set infrastructure and established brand name.

At PAG, we understand that going independent is a multi-faceted decision – and pay is just one of the many factors advisors have to consider.  We believe all advisors should be paid fairly for the tremendous value they provide their clients. Talk to us, and we can help illuminate your best path forward. Our philosophy is to offer the highest payouts possible – allowing you to deploy the money you’re not paying us wherever you see fit.

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