And now for something near and dear to all your hearts...
This is our annual compensation issue, and we've spent the past two months compiling data and comparing advisor payouts from a dozen of the top wirehouses and regionals.
2013 was a great year for the wealth management industry, and comp packages are more or less increasing across the board. That said, it won't surprise anyone to learn that the rich are still getting richermeaning that the biggest producers are still getting the lion's share of the rewards.
Pay plans have also been tweaked to encourage more product sales and to discourage turnover through greater use of long-term retention packages. But the most important incentivesand this too is far from a shockerhave been put in place to drive growth, especially at the high-end of the wealth spectrum. The industry's message to advisors is loud and clear: Either go big, or go home.
There are some notable exceptions, but one issue that doesn't really get addressed by most of the comp plans is creating a more favorable environment for new advisors who are just starting out. As our columnist and industry recruiter Danny Sarch notes, that's a problem when virtually every wealth management firm is facing the demographic challenge of an aging advisor population. Successfully training new advisors would enlarge the talent pool, reduce the costs of recruiting and promote a team approach, since newly trained advisors would tend to share the same values and preferences as those who trained them. Yet, most firms are still struggling to give training its due. With the average advisor pushing 60, one might be inclined to think that among forward-looking firms this would receive greater priority.
On a personal note, this is my first issue as On Wall Street's editor-at-large. As the global economy and the dynamics of wealth management continue to evolve, one of the best things about sitting in this chair is that I get to work firsthand with all of you to keep abreast of the changes. I also get to help celebrate your successes. A case in point: The process whereby we choose our top 10 branch managers of the year is now under way. During the next few weeks, our partner New York Life/MainStay Investments will be culling our list of 100 branch manager honorees to determine the winners. I'm looking forward to sharing their accomplishments with you in an upcoming issue.