One of the questions we field on a regular basis is how much should I pay my new hire. This is a tough question to answer because it can depend on a number of factors and can change significantly in very short intervals. We have written about salary surveys in the past and still advise firms to seek multiple sources of information when designing a compensation plan for their team members. Furthermore, we have set out to provide a slightly different data set to again help in this conversation. Last month, we released the 2022 New Planner Recruiting Salary report. In case you missed it, you can download it here. Here is a summary of the findings from the latest report.

In most markets throughout the country, firms can expect to pay $50-65k for a new college graduate from a CFP program, $70-90k for someone with a few years of experience, and $80k + for a CFP®.  Competitive markets like New York, Washington DC, San Francisco, and Chicago can experience significant spikes in what it takes to secure a hire, due to high cost of living, internal competition from other planning firms, and external competition from industries that pull from the same talent base.  Even if your firm is not in one of these areas, it is prudent to consider what other professions (fintech, accounting, mortgage, etc.) are offering in your area. Furthermore, firms that hired virtually early on had an advantage but that advantage has dissipated as more firms are now hiring virtually. 

As a reminder, the positions that we are recruiting for, in terms of roles and responsibilities, are fairly consistent among this group. Here are the commonalities:

• Paraplanner, Associate Planner or Lead Planner roles requiring 10 years of experience or less
• Most of the Associate and Lead Planners are Certified Financial Planner practitioners and the Paraplanners are working through the CFP educational requirements
• Perform all pre-meeting and post-meeting client work
• Hired as W2 employees of existing RIA
• Not required to bring in business (at least not in the initial years), or transfer a book of business to the new firm

Here are some examples of firms that made competitive offers that candidates accepted. Keep in mind that this is cash compensation data only, and it is assuming a retirement plan such as a 401k with a 3% match and health insurance coverage where the employer pays for 50% or more of the premiums.   

East Coast

Greater Boston - $100 - 250 million AUM firm offered career changer with no experience $55k w/Quarterly revenue bonuses and a $5k bonus after passing CFP exam.

Greater Boston - $150 - 300 million AUM firm offered CFP with 8 years of experience $72k plus 10% bonus for a part-time role.

Greater Philadelphia - $250 - 500 million AUM firm offered CFP with 6 years of experience $120k plus 20% bonus.

North Carolina - +1 billion AUM firm offered a CPA career changer $75k plus 15% bonus.

North Carolina - $250 - 500 million AUM firm offered CFP with 5 years of experience $110k plus 15% bonus.

South Carolina - $250 - 500 million AUM firm offered new college graduate $50k.

South Carolina - $250 - 500 million AUM firm offered new college graduate $56k plus revenue bonus and 30% bonus first-year revenue for new clients.

Washington DC area - $100 - 250 million AUM firm offered CFP with 2 years of experience $80k plus bonus.

Washington DC area - $0 - 100 million AUM firm offered CFP with 4 years of experience $72k base plus $15k bonus. 

Washington DC area - $750 - 1 billion  AUM firm offered CFP with 9 years of experience $120k plus 10% bonus. 

Northern New Jersey - $500 - 750 million AUM firm offered a new college graduate $60k plus 10% bonus. 

West Coast

Seattle - $250 - 500 million AUM firm offered a career changer with 2 years of experience $85k plus bonus.

Virtual 

$500 - 1 billion AUM firm offered CFP with 5 years of experience $74k plus a 10% bonus.

$0 - 100 million AUM firm offered career changer with no experience $65k plus a 4% bonus. 

$100 - 250 million AUM firm offered CFP with 7 years of experience $90k with profit sharing opportunity. 

$0 - 100 million AUM firm offered career changer with no experience $55k. 

$100 - 250 million AUM firm offered CFP with 4 years of experience $78k plus a 10% bonus. 

Fly Over

Denver, CO - $100 - 250 million AUM firm offered a career changer with 5 years of experience $100k plus a 10% bonus.

Houston, TX - $4 - 5 billion AUM firm offered a CFP candidate with 2 years of experience $68k plus an incentive bonus plan.

Dallas, TX - $250 - 500 million AUM firm offered a CPA career changer with 2 years of experience $88k plus a $10k bonus.

Dallas, TX - $0 - 100 million AUM firm offered a paraplanner with 3 years of experience $65k. 

Greater Chicago - $100 - 250 million AUM firm offered new college graduate with no experience $50k. 

Greater Chicago - $2 - 5 billion AUM firm offered a paraplanner with 3 years of experience $65k plus bonus. 

Greater Chicago - $500 - 750 million AUM firm offered a financial planning associate with 1.5 years of experience $91k plus bonus. 

Tennessee - $750 - 1 billion AUM firm offered a Financial Planning Associate with 2 years of experience $47k plus a firm profitability bonus.

Here are a few examples of firms we know of that had offers rejected because they did not make competitive offers.

North Carolina - $100 - 250 million AUM firm offered a CFP with 3 years experience $60k plus bonus. 

Colorado - $250 - 500 million AUM firm offered CFP with 2 years of experience $67k plus bonus. 

Georgia - $500 - 750 million AUM firm offered new college graduate $48k plus bonus. 

Virginia - $750 - 1 billion AUM firm offered CFP with 5 years of experience $100k plus bonus. 

Realize that once your firm develops a reputation for coming in low on compensation, which could happen only after one instance, it is difficult to recover - new hires, and students in particular, do talk to each other - so please use caution when “trying to get the candidate for as low as possible” by making low-ball offers that you hope might stick.

To give your firm the best shot at landing your ideal candidate, start with an average or slightly above average base compensation, and build in several incentive pieces to encourage them in the direction of what you need done the most! The candidates that we tend to work with aren’t necessarily interested in the highest cash compensation offer, but the best opportunity for growth so structuring your offer to include various step ups so they can see where they will likely be if they deliver, is a key component to securing talent in a very job seeker friendly job market.  We have seen prices for solid financial planning talent skyrocket in recent years so if you are planning to make your next hire know that it will likely cost you more the longer you wait. Click here to download our full salary report.