Inflation Outstrips Financial Adviser Salaries

Inflation Outstrips Financial Adviser Salaries

R2A takes a brief look at the numbers and asks what the consequences are and why inflation outstrips Financial Adviser Salaries since 2000.

Comparing data from when we started recruitment in the financial planning industry, Financial Adviser salaries have slipped 20% in real terms over the past two decades.

Advice Costs up, ASIC Fees up, Adviser salaries down.

Using a base cost of goods and services equivalent to the year 2000 Financial Adviser salary ($110k). For comparison, we input this data into the RBA inflation calculator - returning a figure of roughly $207K! (Refer RBA calculator)

Recruit 2 Advice | Financial Planning Recruitment | Salary Review

Since the year 2000: Mind the GAP!

1.9% - annual increase for Financial Advice salaries
2.8%  - averaged inflation rate

$165k average Adviser Salary Package
$207k average salary tracking inflation.

The Gap is $42k, or 20%

2.6%  - annual increase for a Paraplanner
3%  - annual increase for Teacher in NSW
7% - annual increase for Sydney House prices

Non client facing Paraplanners and CSM's have faired better whilst school teachers have faired better again.

“The question is whether this impacts the industry in competitive terms attracting talent”

Inflation Outstrips Financial Adviser Salaries

This raises a few questions relative to salaries and the recruitment supply side.
Will have this have a negative impact attracting University students and new entrants to the industry? Recent reports indicate only 370 new AR entrants in 2023, which is nowhere near enough.

Does the gap need to close?

Consequences - Cost of advice

Closing the gap may have negative consequences towards the intent of the QAR, further pushing up the cost of advice and making it less accessible.
Cost of on-going advice clients is already getting close to $4k per annum, any further increase may not be acceptable to the client market.

View our recent Salary Guide - Financial Advice Market Update - Q3 2024

Relative to salaries, inflation and asset prices - this graph is a shocker!

Recruit 2 Advice | Financial Planning Recruitment | Salary Review

View our recent Salary Guide - Financial Advise Market Update - Q3 2024

To discuss any aspect of the report or recruitment requirements please contact us.

Dugald Braithwaite - Recruit 2 Advice - Financial Planning Recruitment

Dugald Braithwaite

Principal | 25 Years Experience

Since 1998 Dugald has delivered Management Consulting Services to the Financial Planning Industry.

Experience extends to supporting local & international wealth management clients with executive search, strategy, board reporting and large scale project execution.

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