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.
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.
Financial Advisors, as well as people from virtually any profession, can make millions of dollars per year but it is definitely not the norm. While possible, there are (in my estimate) only probably 100-200 financial advisors who take home more than $2mm per year.
Oftentimes, financial advisors require minimum investment thresholds so that 1% fee can cover their costs to manage your money. After all, 1% of a $100,000 minimum means they only earn $1,000 in a year from your account.
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.
In addition, millionaires are much more likely to work with a financial advisor (69%), more than double the amount of the general population (33%).
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 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.
While a 1% annual fee may seem like a small price to pay for professional investment guidance and financial planning, it can significantly erode portfolio returns over long time horizons. Even seemingly minor differences in fees add up in a big way when compounded year after year for decades.
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.
Vast majority of wealthy individuals have a financial advisor, with two thirds saying they need more than one to manage their affairs. 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.
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.
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.
The average return is going to vary from year to year, based on the activity in the market. Studies have shown that financial advisors have the potential to add, on average, between 1.5% and 4% to your portfolio above what the average person is able to get as a return on their own.
All with the goal of better serving their clients. Advisors may quit if they feel that they've been wedged into a role that doesn't fit their skills, or that their firm doesn't encourage them to acquire new skills.
According to a recent study from Deloitte, 77% of professionals shared that they've experienced burnout. The financial advisory profession isn't any different from these general trends. In one study from the Financial Planning Association, 71% of advisors reported being stressed out.
It may surprise you to know that making 6 figures is hardly the norm in the US—even on the lower end of the range. According to the US Census, about 16% of American households make between $100,000 and $149,999, 9% of households make between $150,000 and $199,999, and another 12% earn $200,000 or more.
Only 18% of individual Americans make more than $100,000 a year, according to 2023 data from careers website Zippia. About 34% of U.S. households earn more than $100,000 a year, according to Zippia.
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.
J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires. Read more: What is private banking, and how does it work?