IN Adviser Solutions Announces Results of 2011 Compensation and Staffing Study

Latest Study Finds Commonality Among Firms that Most Successfully Utilize Human Capital

Sep 27, 2011, 11:25 ET from IN Adviser Solutions

NEW YORK, Sept. 27, 2011 /PRNewswire/ -- IN Adviser Solutions today announced the results of its 2011 Adviser Compensation and Staffing Study, sponsored by Pershing Advisor Solutions LLC, a BNY Mellon company.  The report draws on data from more than 600 financial advisory firms with a minimum of $100,000 in annual gross revenue.

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The study found firms that most successfully utilize their human capital – including maintaining staffing at appropriate levels, motivating individuals, providing clear employee and organizational objectives and implementing training processes – realize nearly 80 percent higher revenue, 15 percent higher profitability and nearly 50 percent higher pre-tax income per owner. They are also more productive as measured by revenue per total staff and revenue per professional.

"It can be difficult to quantify the human element of an advisory practice, but as the success of these firms relies almost entirely on the success of the people within it, we thought it imperative to benchmark operational data and give the industry a detailed guide to match the practices that drive the success of high-performing firms," said Kelli Cruz, Director of Research & Consulting, IN Adviser Solutions. "The vast majority of advisory firms are targeting moderate to very aggressive growth, even while growth is slowing throughout the industry. Investing in and appropriately utilizing human capital is crucial to meeting their objectives."

The 2011 Adviser Compensation and Staffing Study provides an in-depth look at compensation for 38 positions within advisory firms, including employee benefit data, as well as detailing current trends in hiring, owner compensation and equity distributions. Key findings include:

  • The majority of advisory firms maintained staffing levels during the recession and are looking to hire as they pursue greater growth;
  • Most employees receive salary and incentives – with salaries rising fastest in the most competitive job categories and incentives for all levels of employees expected to rise in 2011 and beyond;
  • Benefits, including bonuses and paid time off, account for approximately 29 percent of employee total compensation, with fixed and variable compensation remaining relatively stable for the past four years;
  • 74 percent of advisory firms pay their owners a base salary with less than 6 percent of owners receiving distributions as their only form of compensation;
  • While owner compensation is up, ownership opportunities are not expanding fast enough to address looming succession issues.

"Hiring is up, salaries are rising and benefits are expanding but advisory firms must find new ways to stay competitive in terms of adding and developing staff if they want to attract the greatest talent," said Mark Tibergien, Chief Executive Officer, Pershing Advisor Solutions. "The firms that excel in managing their human capital are raising the bar for the entire industry. Managing human capital effectively is an important component in ensuring the future success of any advisory practice."

The full study, as well as an executive summary, is available at www.inadvisersolutions.com. IN Adviser Solutions will host a series of workshops in October that will detail the study's findings. For dates, locations and registration information, please visit www.inadvisersolutions.com.

For more information about the study and IN Adviser Solutions, please contact Jami Schlicher at 973-850-7309 or jschlicher@jcprinc.com. For more information about Pershing Advisor Solutions, contact Paul Patella at 201-403-3609 or paul.patella@pershing.com.

About IN Adviser Solutions

IN Adviser Solutions is the independent research affiliate of InvestmentNews, providing benchmarking studies, objective research, industry data and education to financial advisory firms. The firm's core offerings include survey research on topics of financial performance, technology, compensation and staffing, as well as consulting services dealing specifically with strategic business planning and human capital management. IN Adviser Solutions was formed in 2009 when InvestmentNews acquired Moss Adams LLP benchmarking studies, which are released bi-annually. For more information, visit www.inadvisersolutions.com.

About Pershing Advisor Solutions

Pershing Advisor Solutions LLC (member FINRA/SIPC) is an affiliate of Pershing LLC and a leading custodian to independent registered investment advisors and dually registered advisors working in conjunction with many of Pershing LLC's introducing broker-dealer customers. Pershing LLC (member FINRA/NYSE/SIPC), a BNY Mellon company, is committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Through an innovative custody platform, Pershing Advisor Solutions delivers superior expertise and scalable and customizable solutions to help independent registered investment advisors manage and grow their businesses. Additional information is available at www.pershingadvisorsolutions.com.

SOURCE IN Adviser Solutions



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