CU Financial Adviser Compensation Survey Reveals Key Benchmarks
Nearly half of all financial advisers are paid on the basis of their production over the past six to 12 months, which is a notable change from what the data showed 16 years ago.
That’s one of the findings from the Kehrer Saltzman Financial Advisor Incentive Plan Survey on compensation practices in financial institutions prepared by strategic management consulting firm Kehrer Saltzman & Associates.
“Today almost half of financial advisers are paid on the basis of their production over the past six or 12 months,” said Kenneth Kehrer, a principal with Kehrer Saltzman & Associates in Charlotte, N.C.
“By comparison, in 1997, no credit union or bank reported using a trailing average of production to compute adviser pay. This change to a rolling average has reduced some of the volatility common in compensation plans that tied payout to each individual month’s production,” Kehrer added.
The survey encompassed 40% of the financial advisers working in credit unions or banks nationwide, according to the firm. The survey also provides a side-by-side comparison of more than 30 different compensation plans currently being used by more than 20 financial institutions.
In April, Kehrer presented some of the findings from the survey during a session at NACUSO’s annual conference in Las Vegas.
Organized by the association’s Investment Services Advisory Board, attendees at the session shared experiences about incenting advisers to shift from transactional business to advisory business as well as how to protect the credit union from advisers defecting and taking clients with them.