Adviser pay has hit an “all-time high” according to recruitment consultancy BWD Search and Selection.
The results of its 2017 census, polling over 550 advisers and shared exclusively with Fund Strategy sister publication Money Marketing, shows that employed advisers earned an average of £81,500 last year, up from £74,000 in 2015 and £62,800 in 2012 ahead of the RDR.
These earnings were outstripped by self-employed advisers, who averaged pay packets of £86,000 in 2016, an increase of 3 per cent on the previous year.
BWD writes: “The advice sector is enjoying sustained client demand which, with a slow build-up of adviser supply, has the effect of increasing the incomes of advisers on aggregate.”
“We have found throughout the five years of the BWD Census that when conditions are most positive, the earnings of the self-employed will outstrip those of their employed counterparts. 2016 was a prime example of this.”
The consultancy added that both employed and self-employed advisers were enjoying an “all time high” in salaries.
An increase in bonuses accounted for part of the increase, as average bonuses increased from £17,600 to £20,800 among employed advisers.
Chartered advisers can expect a 7 per cent increase in earnings compared to their level 4 qualified counterparts.
There was little difference in salaries between independent and restricted advisers, though the percentage of advisers offering independent advice increased slightly from 67 per cent to 72 per cent this year.
Paraplanning becoming a profession
Paraplanners, however, still command significantly lower salaries than their adviser colleagues. Total earnings grew 8 per cent, but still averaged out at £36,200.
BWD says: “At the moment there are no plans to make qualifications mandatory for paraplanners but it does seem that in many firms the standing of the paraplanner is on the rise, reflected in a material increase in the earnings of the average paraplanner – now over £36,000. We do feel, however, that paraplanner packages have some way to go before they reflect the emergence of this important group of qualified technically-competent individuals.”
Advisers also appear to receive a higher proportion of other employee benefits, for example, 73 per cent have life cover, compared to 56 per cent of paraplanners.
60 per cent of paraplanners expect their income to rise in 2017, compared to 59 per cent of advisers.
The gender divide
Though the proportion of male advisers fell from 85.2 per cent down to 77.5 per cent, they still dominate the industry and earn 43 per cent more than female advisers, according to BWD.
The proportion of male paraplanners also edged up, from 57.7 per cent to 60.1 per cent.
The average age of the adviser sample was 45, the same as in 2015.
BWD says: “Within the adviser market there are two important recurring themes: the low numbers of females, and the low numbers of new entrants. The former issue abides, as does the large income differential, in favour of men. But for new entrants, in general, there are good signs. We see the average age of advisers as hovering around the mid 40s – significantly lower than the mythical unchanging 55-year-old.”
“The low figure for female advisers is a continued concern, but this year’s figures do show a material increase. Yet it still appears that the sector is not making itself attractive enough to the whole potential workforce.”