It is not uncommon for advisors with 20+ years of experience to make well over $500k per year. I personally know of several who make $1+ million. That kind of personal income is across the board: wirehouse or independent. Many times this can be more when managing a team of advisors.
According to the U.S. Bureau of Labor Statistics, the median annual wage for personal financial advisors was $94,170 in May 2021. It means half of the financial advisors earned more than that, and half earned less. One in ten earned less than $47,570, while one in ten made more than $208,000.
Around 60%, or the majority, of financial advisors with more than five years of experience will earn over $100,000 annually and up to $300,000. At the higher end, $300,000, puts the advisor in the top 10% of household income in the United States, which is not bad at all.
Financial Advisors Can Make Six Figures a Year: Here's How to Become One. Being a financial advisor is a career with many advantages, including the ability to make a high salary. CERTIFIED FINANCIAL PLANNER™ professionals can earn even more than non-certified financial planners.
Very generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could also be higher, such as $500,000, $1 million or even more.
A recent study from Bank of America Private Bank reveals a strong majority of the country's richest individuals have a financial advisor – and most even have a team in their corner.
Bottom Line. A 1% annual fee on a multi-million-dollar investment portfolio is roughly typical of the fees charged by many financial advisors. But that's not inherently a good or bad thing, but rather should hold weight in your decision about whether to use an advisor's services.
Achieving a seven-figure income as a financial advisor is possible but not typical. Adhering to industry regulations and ethics is crucial while striving for high income.
Your financial advisor generally receives between 36% and 40% of the revenue Edward Jones receives from asset- based fees, transactional revenue, ongoing 12b-1 fees, trail commissions, and revenue from premiums generated by activity in your accounts.
Very few wealth managers consistently earn $2 million annually. It's just statistics. A $2 million income puts you in the less than 1% category of advisors—of all private wealth industry professionals—and everyone. To be clear, we're talking about income, not revenue.
It also takes considerable time and effort to build a clientele and is considered a high-stress job by many, even in the best of times.
In addition, millionaires are much more likely to work with a financial advisor (69%), more than double the amount of the general population (33%).
Financial service providers regard a HNW client as someone with at least $1 million in liquid – or investable – financial assets. Clients with assets between $5 and $30 million are considered VHNW, while UHNW clients have assets greater than $30 million.
It's estimated that nine advisors out of ten don't last three years in the industry. That seems high for a career that offers so much promise and potential. Most people come into the business checking all the appropriate boxes for having what it takes.
Bottom Line. Certified financial planners can expect to earn an annual income of anywhere from less than $50,000 to nearly $325,000, depending on a variety of factors including experience, location and industry. CFPs in the securities business make the most, followed by those working for lenders.
You're probably going to start your own company to make 7 figures. The only career paths that could ever touch this would be investment bankers, successful lawyers, high ranking faang software/cybersecurity engineers, or doctors (neurosurgeons, plastic surgeons, or cardiologists).
In our professional experience, achieving an annual income of $300,000 is a realistic target for financial advisors, particularly when leveraging a combination of fee structures, effective AUM growth strategies, and commission-based earnings.
Introduction to seven figures
Such income levels are rare, with only about 0.3% of Americans earning a million dollars or more per year.
It depends on who you ask but a typical answer is anywhere from 50 to 150 clients per advisor. Having 50 clients could be enough if you're focusing on high-net-worth individuals.
The answer depends on various factors, as fee structures and rates differ from advisor to advisor. According to a 2023 report by Advisory HQ, financial advisors may charge a fixed fee ranging from $7,500 to $55,000 or an asset-based fee averaging around 1.02% of assets under management (AUM).
Up to 90% of financial advisors fail within the first three years of being in business — that's a scary statistic, but it doesn't have to be that way. Ask yourself this: Is being a financial advisor worth it? If you say yes, then you have to accept failure as a stepping stone to success.
At a recent Berkshire Hathaway annual shareholder meeting, Warren Buffett shared his thoughts on why he sees financial advisors as the worst people to trust with your money. Buffett believes that financial professionals in aggregate can't do better than the aggregate of the people who just sit tight.
Commissions. In this type of fee arrangement, a financial advisor makes their money from commissions. Advisors earn these fees when they recommend and sell specific financial products, such as mutual funds or annuities, to a client. These are often payable in addition to the above client fees.
Cash equivalents are financial instruments that are almost as liquid as cash and are popular investments for millionaires. Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills. Some millionaires keep their cash in Treasury bills.