*As of February 22, 2021.
Like any profession, there are extremes. Junior advisors typically earn less than the average while they learn their trade. On the other hand, top advisors can comfortably earn six-figure incomes because the quality of their advice is such that clients are happy to pay high fees in return.
Average figures are only approximations based on third-party submissions. They don’t take into account the years of experience, qualifications, or tenure of the advisor, all of which determine actual take-home pay. With that in mind, here are the six factors that affect a financial advisor’s salary in Kansas City.
1. Professional Certifications
CFA, CFP, CIC, ChFC — there’s an alphabet soup of financial certifications. And these three letters can have a significant impact on your pay grade.
For instance, to get the CFP designation, candidates must hold a degree from an accredited college, complete a comprehensive course of study and pass a series of rigorous exams. While most firms will not insist on CFP certification, holding it is the holy grail. It shows that you meet the highest ethical and professional standards.
Customers often check for CFP certification when selecting a financial advisor, so employing advisors with the CFP designation is extremely valuable to firms trying to attract new business. Most employers will give extra credit to finance professionals who have the proper certifications.
2. Years of Experience
Typically, the more experienced you are, the higher the pay. At the bottom of the scale, a junior financial advisor with up to 24 months’ experience may be lucky to earn $40,000 to $50,000 per year. Top-flight, 20-year qualified advisors might pull in $200,000 to $300,000 annually. That’s a wide range.
Past employment as a stockbroker, wealth manager, investment advisor, business development manager, or accounting professional all counts toward your experience. Be sure to emphasize these roles if you’re attending an interview or having a performance review. The skills you acquire in these jobs translate well to a financial advisor’s position, making you worth more money.
3. The Company You Work For
Financial advisors work in all sorts of places, from banks and insurance companies to wealth management firms and retirement planning organizations. You’ll even find them in educational institutions, law firms, and tax consultancies. There are a lot of options!
As a rule of thumb, Fortune 500 and nationally renowned privately-owned companies will offer higher salaries than niche, single-office operations. But that’s not always the case. Some boutique Kansas City firms have a policy of recruiting the best of the best. These firms may be offering extremely competitive salaries.
If you’re shopping for a new position, consult the employer for actual salary details. They may vary significantly between organizations.
4. Supply and Demand
According to a 2017 CareerCast report on the toughest jobs to fill, financial advisors are among the most in-demand positions. And that makes it easy for well-qualified advisors to jump ship when a better opportunity comes along.
Why is this good news?
Generally, employers are willing to pay a premium for someone who remains loyal to the company. Have you stuck around? Brought in clients? Added value? If so, these could be your most vital negotiating points in your subsequent request for a promotion or performance review.
How do Kansas City’s salaries compare with neighboring cities in Missouri? For generalized comparison, St. Louis financial advisors have the highest wages in the state at $64,859 per year. Kansas City comes a close second, offering an average salary of $64,602 per year*.
*As of February 22, 2021.
6. How You Charge
The way you or your firm charges clients impacts your salary. For example, an advisor who works on an hourly rate can only ever earn the sum of the hourly rate multiplied by the number of hours he or she bills in a year.
Let’s assume an advisor charges $200 an hour and bills 800 hours a year. She will gross $160,000 of revenue before overhead. As a self-employed financial advisor, she will take that amount, less taxes and expenses. As a salaried advisor, she will take home a percentage of that revenue based on her firm’s payment structure.
Some financial advisors earn a mix of salary and bonuses, which is typically determined by the number of client assets you manage and the amount of revenue you bring in. If you charge a percentage of assets that you manage — one of the most common ways of structuring fees — you will make more money as your account value grows.
So, the better your record of investing and relationship-building, the more cash you’re going to receive.
The Bottom Line
The job title “financial advisor” encompasses everyone from junior support advisors to top-notch retirement planners with years of technical expertise. Annual salaries are therefore quite varied. Even regional averages don’t offer much of a comparison.
The bottom line is this: always ask the company for specific salary details if you’re job-hopping. And know that whatever your experience, St. Louis financial advisors can command a far higher-than-average salary.