Record year yields modest pay rise

Salaried financial planners have benefited from a pay increase of between 3 and 5 per cent, according to the latest research from the Financial Recruitment Group, conducted on behalf of Money Management.

While many advisers would question such a modest rise after a year of buoyant investment markets and strong economic growth, it is nonetheless an improvement on last year, where the average increase was only around the 2 per cent mark.

In 2005, planners employed by a bank can expect a salary of around $75,000 — with a range of $65,000 to $85,000 the norm — as well as an additional bonus payment of between $20,000 and $50,000.

For advisers employed by non-banking organisations, remuneration packages are more generous, with $80,000 to $100,000 the standard range, and bonuses starting at $30,000 and rising to as much as $80,000.

The average senior planner at a bank can expect to take home a salary of between $70,000 and $90,000, while senior non-bank advisers benefit from a package of between $99,000 and $120,000. And for a lucky few, packages of upwards of $400,000 are not unheard of, according to Peter Dawson, executive director of the Financial Recruitment Group.

Indeed, the research shows that senior financial planners can receive as much as $110,000 in incentive pay.

Industry trends

According to Dawson, this incremental uplift is largely due to a renewed recruitment focus by both dealer groups and the banks, in what has been an extremely confident employment market.

“Major dealer groups have sharpened their marketing approach to recruitment using direct mail campaigns to target financial planners, with a concentrated follow-up campaign,” he says.

And the banks are following suit, with Dawson adding: “The bank financial planning divisions continue to build their recruitment programs. There is evidence the focus of recruitment is not from each other’s ranks, but that the banks are seeking planners from non-bank backgrounds.”

According to Paul Forbes, head of distribution at Guardian Financial Planning, the banks continue to set the industry benchmark in terms of remuneration levels. So as a result, non-banking organisations are forced to offer higher pay scales.

“A lot of planners will say ‘if I’m going to be underpaid, I might as well go and work for a bank’.”

Planners with transferable funds under administration are most sought after by recruiters, but Dawson adds that “dealer groups continue to recruit planners who have a track record in developing strategic alliances with accountants and other professional groups”.

Recruitment drives

Numerous dealer groups and banking organisations intend to increase adviser numbers during 2005, perhaps in part to make up for a recruitment slowdown as financial services reform was bedded down.

However, getting experienced advisers on board will not be easy, according to Alison Loader, head of Profusion Recruitment.

“The demand for experienced advisers who have a strong track record of success in the industry will always be at a premium,” she says.

And shortages may prompt further salary increases.

“If the investment markets continue to be buoyant, and businesses continue to be successful and make more money, it will create more demand for experienced, qualified advisers. If that continues, one would have to assume that salaries will follow suit.”

National boundaries

Most people would assume that Sydney-based advisers receive the fattest pay cheques — and that is true to a certain extent, but only for non-bank planners.

For those working in a banking environment, location makes no difference. A Sydney planner on the industry average salary of $75,000 could transfer to the Perth office and receive exactly the same amount.

In terms of non-bank advisers, Adelaide and Canberra-based planners receive the lowest salaries with an average income of $72,000, followed by Brisbane at $78,000. The top three cities are Sydney ($93,000), Melbourne ($88,000) and finally Perth ($82,000).