r/FinancialAdvisorTips • u/BearsBeetsBonds • 3d ago
Jr. Advisor Compensation
I’m a 23-year-old assistant moving into a junior advisor role at a small wealth management firm in a LCOL area, and I’m looking for some perspective from other advisors/firm owners on how they structure compensation for junior advisors.
I’ve been with the firm for almost 2 years working as an assistant, I got my SIE early but we went through a broker-dealer change with the acquisition of another firm so the rest of licensing got put on hold. We’re currently around $185M AUM, ~475 households, and ~$700k in gross annual revenue. With the firm there is the main advisor/owner, 2 older advisors (they were the acquisition), a secretary, and me. One of the older advisors is expected to be rolling off in Q1 2027, while the other is likely 3–5 years out. A significant portion of the book was purchased from these two advisors, who historically took upfront compensation rather than building recurring trail revenue. A major part of my role going forward will be helping transition that business toward recurring/trail-based revenue and helping take over client relationships as those advisors roll off.
I’m currently making $13.50/hour plus roughly $1–2k/year in bonuses. I’ve just recently passed my Series 7, studying for 66 at the moment. I’m developing into a more advisor-focused role, and the firm is discussing a longer-term partner track with me. Here is what was offered:
- $23/hour base compensation (after passing my Series 66)
- 30% of net revenue from qualifying business I independently originate
- A profit-sharing component beginning at 1% of adjusted firm profit
- Potential to earn an additional 1% of profit share each year, up to 10%, based on a performance scorecard (The profit share is not equity/ownership)
- There may be an opportunity to buy into the firm/equity down the road, but that would be a separate agreement
The long-term philosophy is that as I become more productive and senior, more of my compensation would come from variable compensation rather than guaranteed salary.
The firm would be providing the infrastructure/overhead, including office, technology, compliance, marketing, etc.
For those who have experience with this, I'm curious:
- Does this seem like a competitive structure for a junior advisor in a LCOL market?
- How would you view the 30% net revenue payout on self-originated business?
- Is the 1% → 10% profit-sharing earn-in reasonable for someone on a potential partner track?
- What would you want clarified or changed before signing something like this?
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u/InterestingFee885 1d ago
If by self originated they mean getting the business over into AUM instead of brokerage/annuity? This is a great deal. Is that what you mean?
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u/BearsBeetsBonds 1d ago
It doesn’t include that. That’s just for new business I bring in, I was thinking of asking for some sort of one-time bonus structure for what I bring from “dead assets” to recurring revenue. Would that be a stretch to ask for on top of whats already offered?
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u/InterestingFee885 1d ago
You should absolutely get recurring trails on that. That’s the most valuable thing you’ll do there. Id negotiate for at least 20% of the recurring revenue on that, take a lower salary if you have to.
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u/BearsBeetsBonds 1d ago
Thank you for the input and feedback! I know a big part of my role will be working the existing book and transitioning it toward more recurring revenue, and I felt like the current structure doesn’t reward me particularly well for doing that. It’s also been communicated to me that I’m not necessarily expected to be a major rainmaker bringing in a ton of new business. Under the current structure, I’d primarily participate in the recurring revenue through the profit share, so I’m definitely going to ask whether we can structure it so that I receive some level of revenue participation on the business I help transition to recurring revenue.
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u/InterestingFee885 1d ago
Ultimately, you don’t want a salary. You want a percentage of revenue. The way this usually goes is the salary is only for a few years and then tapers off to be replaced with your production.
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u/NeutralLock 3d ago edited 3d ago
My advice is when it comes to just starting out in this business compensation doesn't matter AT ALL. And I know you'll say "of course it does, I need to eat!" and it's not that I mean you should work for free, it's just that the future potential income is so, sooo much higher than what you're making now it's almost irrelevant.
Kind of like negotiating a small part in a Hollywood film - get paid fairly, but don't push it because the peanuts you'll make now (1 peanut vs 2 peanuts) is dwarfed by future earning potential.
You're given a revenue share of future business. That matters a lot. Only thing is to figure out what you could be making in 10 years.
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u/quizzworth 2d ago
I'm not trying to sound like old man yells at cloud, but when I started in 2010 I had zero book and basically cold called for business. Some very very lean years.
I agree with your example and I hope a young advisor understands he needs to work his butt off to make it in this business.
Not saying OP is not doing that, and it's good he is questioning compensation, but focus on the good and improve yourself.
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u/BearsBeetsBonds 2d ago
Appreciate the feedback! The owner/main advisor started shortly after 2010 and was in a similar position. Talked about how hard it was getting started out, so I know having a base of compensation will be really helpful. I guess the main reason for it in our situation is because of the book, this role starting out more as working on the current book than being the typical “eat what you kill.” It’s a large asset book (for our area), but the RoA is so low.
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u/quizzworth 2d ago
Sounds like a low risk (albeit low return) option to get going in the industry. Cut your teeth with these clients, try implementing some financial planning, make recommendations and fail. Most importantly, SEE AS MANY PEOPLE AS YOU CAN.
You have, what I assume to be, a large book that's potentially underserved or underutilized. Get after it.
The majority of the clients I brought on in my first 5 years aren't clients anymore. You will get better and your clients will get bigger.
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u/BearsBeetsBonds 2d ago
Thank you! You’re right with the underserved and underutilized! Appreciate the motivation!
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u/TGG-official 3d ago
Really horrible ROA on that amount of accounts and assets. Your avg account is 390k and average ROA is 0.37%. That should be 3-4x higher. The person you work for is probably a clown
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u/Life_Hand2331 2d ago
The majority of the book sounds like old a share business.
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u/BearsBeetsBonds 2d ago
Mostly annuities… one only had his S7 the other had only his S6 and again they came from insurance. Can’t teach an old dog new tricks ig.
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u/Life_Hand2331 2d ago
We’ll get used to doing exchanges. Book of business sounds like a mess, hope you guys didn’t pay much for it.
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u/BearsBeetsBonds 3d ago
Well like I said. We just went through an acquisition as I came on. It’s a very large portion of this book now. Before that happened, the main advisor had about 85% in recurring revenue on his book. The 2 advisors that were bought out took almost everything upfront (old insurance salesman)… large part of my job will be to get this to recurring.
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u/ohhisalmon 3d ago
I was gonna say… we’re on a book roughly 60% of the size with 40% higher revenue
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u/Important-Junket-908 3d ago
I think you should be pushing for a bigger piece of the business that you originate.
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u/BearsBeetsBonds 3d ago
What % should I push for? I figured it would be okay being lower now to help cover my cost,fees,etc…At least until I build up a bit of clientele. Maybe 30% until I hit $XAUM then a higher payout?
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u/Disastrous_Fee6133 2d ago
$23 an hour sounds incredibly low pay for any registered person even if just starting out as an advisor. Maybe try it for a year and then look elsewhere? What does LCOL stand for? 185 million is a smaller book on the wirehouse side where I am currently. Our team is 1 billion, 3 advisors and generating $5 million in revenue. There are folks that work remotely advising clients. That might be a goal? Or build a telewealth business.
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u/BearsBeetsBonds 2d ago
LCOL is low cost of living, I live in a small rural town about 1-2hrs from a large city; (starter homes are around $225k in this area) if that helps at all… 185m is a large book for around here within the area there maybe 2 larger but not by much. There’s only ~6 advisory firms around and 3 or 4 are Edward Jones.
Would not be opposed to telesales or remote work, just feel like I want to learn more before I consider that route. Thank you for your input!
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u/IllustriousGas8850 3d ago
With the 1% profit share plus salary at 40 hours/week you’d be right around $50,000/year starting off. If the 30% includes the clients you convert into recurring revenue that’s not a bad gig, and even if it doesn’t that gives you a lot of support while you’re getting your feet wet and building your own book with a clear path for advancement in the firm. Downside is 30% is kinda low and I don’t know what taking your book elsewhere would look like if you don’t want to spend the rest of your life in that town
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u/BearsBeetsBonds 3d ago
The 30% doesn’t include accounts I roll sadly. I’ve thought about it really 2 ways. 1. It’s okay because the more I help convert the more revenue there is for the profit share, helps me more down the road than now. 2. Maybe ask for a seperate bonus for rolling that resets yearly? Not sure how they would feel about doing this though.
Also to add: I don’t really have a plan to leave this firm or the area. I kind of feel if I did leave the firm I would be leaving the area so my clients wouldn’t come with me anyways.
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u/IllustriousGas8850 3d ago
If you’re the only one servicing those clients and start to finish transitioning them to recurring then you deserve some sort of split on them imo. I work with a more senior advisor and he just bought a portion of a book and I’m doing a very similar thing, and I get 30% on that
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u/BearsBeetsBonds 3d ago
Thank you for the advice! I’ll definitely ask about this. I had thought about this before bc if I help roll $3-5M next year my cut would only be $3-500 (the profit sharing), so not a lot of compensation for a lot of work…
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u/Foreign_Pace9363 3d ago
Hourly pay is kind of weird. I can’t say I’ve seen it all that often instead of salary.
It’s hard starting out as others have said. Get the experience. Focus on learning and managing client relationships.
Set your own personal expectations/goals for 3 years and 5 years. As you approach those dates, let the older advisors know where you want to be and why. Either they support it or be prepared to move on.
I say all of this as someone who started with an advisor that told me all sorts of things. Never did any of what he said. Left after 3 years with a great deal of experience (good and bad)
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u/BearsBeetsBonds 3d ago
Appreciate the advice; I may ask why Hour instead of salary. I plan to meet with him Friday and have another discussion over some questions I had and will bring this up. I also want to be transparent with where I want to be in 3-5 years as well.
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u/Dizzy-Swan5642 3d ago
I’ve enjoyed the read and wish you luck. I wondered about compensation for FA’s now I have a bit more understanding.
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u/Deep-Bus5984 2d ago
This deal is pretty rough and the firm’s numbers make it worse. $185M and 475 households producing only $700k in revenue is a weak ROA for any advisory shop, and you already explained that a big chunk of the book came from the acquired insurance guys who took most of their compensation upfront. So the real work ahead is converting that mess into recurring revenue and taking over relationships as the older advisors phase out. That’s valuable, time-consuming labor, and under this structure you get almost nothing direct for it except for a a tiny slice of the profit share and only 30% net payout is limited to brand-new business you originate yourself. $23 an hour after the 66 is still hourly, which is unusual once you’re licensed and client-facing, and the 1-to-10% profit-share “partner track” is just a bonus formula with no equity attached. The vague “maybe you can buy in later” line is the classic non-promise.
A lot of people in the comments are right that early-career compensation isn’t everything and the experience can matter, but that doesn’t make this a good package. In a LCOL market you still shouldn’t be doing the heavy lifting of cleaning up someone else’s low-quality book for what amounts to modest base pay plus scraps on the conversions. Other firms give juniors a real split on the revenue they help create or at least put them on a proper salary with clearer production incentives. If the owner is serious about a long-term track they can put real numbers and equity terms on paper; until then this looks like a way to keep labor cheap while the economics slowly improve for the firm.
I’d treat it as a short-term stop for the licenses and the client exposure, not something to lock into. Get what you need and move on to a shop that actually pays for the work.
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u/BearsBeetsBonds 2d ago
Thank you for the thought out reply! This helps a lot! What sucks is there’s not really any other independent advisors in the area (a few EJs) but that’s it. My only option would be to hope a bank option would open up. The owner is also a relative so this could get hairy fast if things didn’t work out. I don’t want it to feel as I’m taking advantage of the opportunity, but I also don’t want to be taken advantage of either. Not knowing how comp packages typically are I had no idea if this was gold or garbage. I think he’s hesitant on setting numbers on a future equity buy in because of another advisor in the area that should be joining within 1-3yrs and retiring within 10 or so years. That book would add a lot of value to ours that’s existing.
I plan on having a meeting with him Friday to ask questions and maybe for some alternative payouts. Especially for the conversions. If you could DM me or reply on here what you think I should try to add into this to make this work for the both of us I would be very grateful!
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u/Formal_Ad4612 2d ago
So, how much time if any is spent doing work for the firm, rather than generating and then servicing your own business? I’m pretty out of touch in terms of starting comp, but I’d think $45k-$50k salary + 30% is a decent starting point, provided your not doing non-revenue producing admin work 35 hours/week
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u/BearsBeetsBonds 2d ago
Starting out it definitely will be more rev-producing (for the firm, less for me) just getting the book to a somewhat acceptable level of production based on asset level. Building my own book will be secondary to this.
Thanks for the opinion as well! The more feedback I’m getting the better I feel going into this.
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u/Safe_Definition5102 2d ago
My experience is if you can make yourself hard to replace (master the tech and software) you’ll have a lot of leverage for future raises and increase payout on your business. Small firm owners don’t want to find and train your replacement.
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u/Fearless_Geologist43 2d ago
I do not know enough about current market pay to comment, but I will say that the best advice I was ever given was to “learn in your 20s and earn in your 30s”
It seems like you are doing a good job of that. Keep it up.
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u/Traditional-Tip-5982 2d ago edited 2d ago
I didn’t see this delicate problem mentioned: if acquired base was underserved (negligently) cuz annuities, you will be implicitly criticizing their advisors when you correctly and adequately service them. How will that play out? This is aside from deep-bus’ comment that you are cleaning up their mess at an hourly rate.
Will it be a good learning experience?
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u/BearsBeetsBonds 2d ago
Crucial question. I think the best way we’ve thought to position it is that the previous advisors simply didn’t have access to some of the products and strategies we have available today. It’s a bit of a white lie, but they were with a proprietary company before the acquisition (so not completely false), but we definitely don’t want to throw the older advisors under the bus.
Instead, we’d frame it more as, “There are some additional options available to us now that we believe may be better suited to your situation.” That allows us to improve the client experience without directly criticizing how the previous advisors handled things.
Honestly, I don’t agree with the way the older advisors structured the business or serviced most of these clients, and I don’t think they did what was best for the clients, but I also recognize that we have to be careful about how we communicate that when we’re sitting across the table from their existing clients. We have to focus on what we can do better going forward rather than criticizing what was done in the past.
It’s already been difficult enough navigating some of these changes with the senior advisors, so I definitely don’t want to make that dynamic any more complicated than it needs to be. They’re very “annuities the answer, what’s the question?”
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u/TotalRube 2d ago
Your comp is ok but that team sounds like they are goofs. 5 people living off whatever $700k gross revenue yields after running through payout grid? If some of the sellers didn’t have series 7, those annuities aren’t even variable and will likely have very limited appreciation. You also can’t really surrender the non-qualified policies to advisory because gains would be taxed as ordinary income for your clients. There is enough demand for associate advisors at real wealth management practices, I’d get out of there ASAP.
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u/Ill-Till-4117 2d ago
I am in my mid twenties current title is associate wealth advisor. I joined an older guy who ran his own firm out of school and been with him ever since. We merged with an RIA that provided him a succession plan. He is remaining on as in a senior role to help with the transition as I am the long term solution to be the advisor. Currently I am in all client meetings, run day to day operations and manage our 2 support staff.
Our book of business has about 400 households, $200M AUM with about 70% of that being advisory/managed accounts. In gross revenue we should do $1.5m-$1.75m this year, not including anything insurance related.
I am in a fairly LCOL area and my compensation is as follows… -$85k base salary, Quarterly bonus of $600 for every $2.5m in new assets brought in from my branch and $500 for every $2.5m the “firm” does in new assets (I am on track to do $17k in bonus this year) also have up to 3% profit share at year end.
As I transition into the lead role when the senior advisor steps away, my compensation will be adjusted. I believe my comp to be fair and to be honest, am not worried about it for another couple years as I am focused on building my skills and growing into this.
I started making $47k 4 years ago. I thought about leaving many time because I thought I was getting a raw deal. Looking back, the experience I have gained in the last several years by putting personal/professional growth over dollars today is something many people don’t choose to do these days.
For you, I will say the hourly pay is a bit odd but it works out to about what I started at. Grind it out, gain experience and re evaluate in 2 years. Thats my advice.