Factor in the new tax law and the need for high-quality advice rises further, which all bodes well for the financial advisory business.
Consumer use of financial advisors increased significantly from 28% in 2010 to 40% in 2015 with 7 in 10 indicating they work with a certified financial planner, according to data from the CFP Board of Standards.
Advisory firms like Fidelity and Charles Schwab dramatically ramped up the number of advisors on hand to enhance their investing services for clients.
The rise in demand — and pay — lured more professionals to the field. Now, there are about 271,900 personal financial advisors in the U.S. with an annual median salary of $88,890.
“It’s a desirable position for people coming out of college because it commands a high wage,” said Kyle Kensing, online content editor at jobs site CareerCast.
This year, however, marked a sharp change in course. In fact, as of April, financial advisors notched the biggest decline in base pay among all jobs tracked by Glassdoor, down 3% year over year, to $53,196.
The explosion of less-expensive robo-advisors, which give retail investors access to automated investment strategies, is putting pressure on wages, according to Daniel Zhao, Glassdoor’s senior economist.
“Automation is not just affecting manufacturing, it is also impacting white collar jobs,” he said.
At Schwab, for example, assets in Schwab’s advisory solutions rose 9% year over year to $298 billion as of March 31. However, assets in Schwab’s digital advisory services jumped 23% from a year earlier to more than $37 billion.