FINANCIAL PLANNING CAREER PATHS BUILDING MORE …

FINANCIAL PLANNING CAREER PATHS BUILDING MORE SUSTAINABLE AND SUCCESSFUL BUSINESSES

Partner

Lead Advisor

Service Advisor

Associate Advisor

Analyst

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Lead Founding Sponsor

Founding Sponsors

WORKFORCE DEVELOPMENT ADVISORY GROUP

The CFP Board Center for Financial Planning is grateful to members of its Workforce Development Advisory Group for their contributions to this publication.

Mark Tibergien ? Chair Chief Executive Officer Pershing Advisor Solutions

Yusuf Abugideiri, CFP? Partner and Senior Financial Planner Yeske Buie

Audra Bohannon Senior Partner Korn Ferry Hay Group

Megan Carpenter Chief Executive Officer and Co-Founder FiComm Partners

Luke Dean Financial Planning Program Director Utah Valley University

Roy Diliberto, CFP? Founder RTD Financial Advisors, Inc

Kate Healy Managing Director, Generation Next TD Ameritrade Institutional

Alan Moore, CFP? Co-Founder XY Planning Network

Paul Shane Senior Director, Talent Acquisition & Onboarding Northwestern Mutual

Kathleen Sindell Consultant, Author, CFP? Chair and Adjunct Full-Professor, Finance University of Maryland, UMUC

Connie Thanasoulis Career Coach, Author, Speaker and Adjunct Professor SixFigureStart?

Mark Wernig, CFP? Portfolio Manager Dowling & Yahnke

TABLE OF CONTENTS

CFP Board Center for Financial Planning's Workforce Development Advisory Group Members...............3 Introduction.................................................................................................................................................................................................6 Executive Summary................................................................................................................................................................................8 1 Role and Purpose of Career Paths in Financial Services..............................................................................................10 Why Professionals Need Career Paths.........................................................................................................................................11 Managing Expectations.......................................................................................................................................................................12 Should Everyone Travel the Full Length of the Career Path?........................................................................................ 14 Communicating Career Paths.......................................................................................................................................................... 15 An Overview of Functional Groups in Financial Advisory Firms................................................................................. 18 Investment Functional Group Career Path............................................................................................................................... 19 Operations Functional Group Career Path..............................................................................................................................20 2 Climbing the Five Rungs of The Financial Planning Career Ladder..................................................................... 22 Positions on the Financial Planning Career Path................................................................................................................. 23 Promotions on the Financial Planning Career Ladder...................................................................................................... 28 Analyst......................................................................................................................................................................................................... 29 Job Responsibilities.............................................................................................................................................................................. 29 Associate Advisor.................................................................................................................................................................................. 35 Service Advisor........................................................................................................................................................................................ 41 Lead Advisor/Managing Director................................................................................................................................................. 47 Principal/Partner.................................................................................................................................................................................... 55 3 Career Path in Practice-Building Retail..................................................................................................................................64 An Overview: Three Career Stages.............................................................................................................................................. 65 Training Stage.......................................................................................................................................................................................... 67 Practice-Building Stage......................................................................................................................................................................68 Team-Building Stage............................................................................................................................................................................69 4 Compensation for Financial Planners...................................................................................................................................... 72 The Role of Business Development and Client Ownership............................................................................................ 73 The Components of Compensation............................................................................................................................................ 74 Salary-Based Compensation Method......................................................................................................................................... 76 Payout Compensation Method (Percentage of Revenue).............................................................................................. 78 Compensation's Role in Creating Diversity ............................................................................................................................ 82 Appendix .........................................................................................................................................................................................................84 Participating Firms and Professionals........................................................................................................................................ 85 About the Research.............................................................................................................................................................................86 About the Researcher.........................................................................................................................................................................86 About CFP Board .................................................................................................................................................................................86 About the CFP Board Center for Financial Planning .......................................................................................................86

LIST OF TABLES, FIGURES AND CASE STUDIES

TABLES TABLE 2.1: Analyst, the first rung of the financial planning career ladder...................................................................... 23 TABLE 2.2: Associate Advisor, the second rung of the financial planning career ladder...................................... 24 TABLE 2.3: Service Advisor, the third rung of the financial planning career ladder................................................. 25 TABLE 2.4: Lead Advisor/Managing Director, the fourth rung of the financial planning career ladder........ 26 TABLE 2.5: Principal/Partner, the fifth rung of the financial planning career ladder............................................... 27 TABLE 2.6: Promotion considerations on the financial planning career ladder.......................................................... 28 TABLE 2.7: Median base salary and incentive salary for Analysts......................................................................................34 TABLE 2.8: Median base salary and incentive salary for Associate Advisors............................................................... 39 TABLE 2.9: Median base salary and incentive salary for Service Advisors....................................................................45 TABLE 2.10: Median base salary and incentive salary for Lead Advisors/Managing Directors.......................... 53 TABLE 2.11: Median base salary and incentive salary for Principals/Partners................................................................ 61 TABLE 4.1: Average payout by practice size of the four largest practice-building organizations.................... 79 TABLE A1: One-page career path for financial advisors..........................................................................................................84 FIGURES FIGURE 1.1: Functional groups found in financial advisory firms.......................................................................................... 18 FIGURE 3.1: Career path for financial advisors in practice-building organizations....................................................66 FIGURE 3.2: Team career path for financial advisors in Ensemble practices................................................................66 FIGURE 3.3: Optimal organizational structure of a team-based practice......................................................................70 FIGURE 4.1: Compensation system components for financial advisors.......................................................................... 74 FIGURE 4.2: Median incentive compensation for career path positions......................................................................... 75 FIIGURE 4.3: Total cash compensation by position in salary-based systems.............................................................. 77 CASE STUDIES Plante Moran...................................................................................................................................................................................................... 13 Urban Wealth Management...................................................................................................................................................................... 15 Vanguard............................................................................................................................................................................................................. 16 Aspiriant................................................................................................................................................................................................................17 Carson Wealth.................................................................................................................................................................................................. 31 Schwab Private Client................................................................................................................................................................................. 32 Yeske Buie..........................................................................................................................................................................................................34 Altair .................................................................................................................................................................................................................... 38 6 Meridian......................................................................................................................................................................................................... 40 Moss Adams.....................................................................................................................................................................................................46 Tolleson Wealth Management................................................................................................................................................................. 58 Moneta................................................................................................................................................................................................................. 62 Merrill Lynch......................................................................................................................................................................................................66 Northwestern Mutual...................................................................................................................................................................................68 Raymond James............................................................................................................................................................................................. 76

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