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Compensation costs for RIAs that had more than $250 million in assets under management represented 71% of revenue at the median in 2018, Charles Schwab reports.
Some three-quarters of firms in Schwab's 2019 Benchmarking Study said they planned to add employees in the next 12 months. And 42% of firms recruited staff for open positions from other RIAs in 2018.
Schwab said release of discrete compensation results from the larger study was intended to help industry leaders develop strategies for compensating, motivating and retaining staff by comparing their approaches with those of their peers.
The 2019 benchmarking study, fielded in the first quarter of last year, comprised self-reported data from 1,310 firms, 984 of which also participated in the compensation portion of the study.
|Average salaries
The study found that base salaries for client account management, sales and marketing roles ranged from $57,000 to $146,000 at the median, and total cash compensation from $62,000 to $203,000.
Total median cash compensation, including owner profit distributions, was $62,000 to $231,000.
Seventy-six percent of client service associates, those who provide non-advice-related support to clients, received performance-based incentive pay, more than those in other positions.
Twenty-seven percent of senior client account mangers/relationship managers had compensation tied to revenue, and 46% of these employees had some degree of firm ownership — again, more than those in any other role.
Staff in investment positions received base salaries in the $59,000-to-$130,000 range at the median.
Investment professionals' total cash compensation ranged from $65,000 to $161,000, and their total cash compensation, including owner profit distributions, ranged from $65,000 to $173,000.
More than 60% of all investment positions received performance-based pay, according to the data:
- 85% of portfolio administrators
- 83% of paraplanners (who provide tech support to client account/relationship managers)
- 81% of traders
- 77% of research analysts
- 68% of financial planners
- 61% of investment/portfolio managers
Thirty-three percent of investment/portfolio managers and 14% of financial planners had some degree of firm ownership: 24% of the latter and 17% of the former had 50% or more ownership.
For staff in operations and administrative positions, base salaries ranged from $43,000 to $98,000 at the median, while total cash compensation — both with and without owner profit distributions — ranged from $46,000 to $110,000.
Eighty-two percent of technology professionals received performance-based incentive pay, as did 80% of human resource staff and 73% of operations directors/managers, operations associates and receptionists.
Operations and administration staff were less likely than other workers to receive firm equity, but 13% of operations directors/managers did hold some firm ownership, according to the data.
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Michael S. Fischer
Michael S. Fischer is a longtime contributing writer for ThinkAdvisor. He previously reported on trade and intellectual property topics for the Economist Intelligence Unit and covered the hedge fund industry for MARHedge and Reuters News Service.
