Principals’ Community managing director Kon Costas has addressed the issue of ultra-high salary expectations for advisers, cautioning against unrealistic projections. Contrary to a report indicating a significant pay rise in NSW, the community’s data reveals more modest salary increases. The average adviser salary in NSW saw a 4.5% increase, while senior advisers experienced a 7.1% rise.
The Principals’ Community, supporting over 120 self-licensed financial planning businesses and 1220 advisers, collected data through its annual Business Insights program. This data challenges the notion of substantial salary spikes, showing a national average salary growth of 6% for advisers and 4% for senior advisers.
The data also highlighted that salary costs represent about 50% of advice practice revenue, making it the most significant expense for these businesses. On average, an adviser manages 98 client groups, generating around $702,000 in ongoing revenue and $49,000 in new business.
Support staff play a crucial role in the advice process, with their productivity and associated costs impacting adviser revenue. The research found that 32% of practices aim to recruit customer service officers, administrators, and paraplanners in the coming year.
Besides monetary rewards, businesses are focusing on non-financial incentives like culture, values, and standards to attract and retain talent. Some firms offer additional leave, flexibility, or equity stakes to incentivize employees. Staff equity schemes have gained traction, although not all staff opt-in due to various reasons.
Costas emphasized the importance of considering the broader business environment beyond financial rewards. He noted that a positive work culture, efficient systems, and high standards are critical for long-term employee satisfaction and retention.
Looking ahead, while Costas refrained from speculating on future salary trends, he underscored the need for exceptional circumstances to drive significant year-on-year increases in adviser salaries. The data paints a realistic picture of the industry landscape, indicating a steady, albeit moderate, growth trajectory in adviser remuneration.
As the war for talent intensifies in the financial advisory sector, businesses are recognizing the significance of holistic incentives beyond monetary compensation. By fostering a supportive work environment and aligning with employees’ values, firms can enhance employee engagement and loyalty, ultimately driving sustainable business growth.
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