In the world of financial advisors, certified financial planners are better compensated and have greater job satisfaction than their non-CFP peers.
That’s the thrust of a new study by the CFP Board of Standards that provides data on financial planners in general and those holding the CFP designation. The median total compensation for all financial planners was $192,000 in 2023, and CFPs earned 10% more, after controlling for factors including job experience and company size, according to the CFP Board 2024 Compensation Study.
CFPs Like Their Work
The research also reveals that 85% of CFP professionals have “somewhat high” or “very high” personal fulfillment in their career. Additionally, 89% of CFPs plan to stay with their current company for the next two years, and among those planning to leave their company, 67% plan to remain in the financial planning profession.
“It’s no surprise that CFP professionals are extremely happy in their careers,” CFP Board CEO Kevin R. Keller said in a press release. “The findings in the 2024 Compensation Study show that a career in financial planning is quite possibly the best job ever.”
Job areas rated as good or excellent by the CFPs surveyed include job stability (88%), work/life balance (82%), career advancement (79%) and compensation (74%):
Beyond monetary compensation, a high percentage of CFP professionals said their employer also provides them with many additional perks including professional certification/designation dues (96%); health insurance (95%); dental insurance (92%); professional association dues (91%); eyeglasses, lenses and eye exams (88%); professional education access and funding (86%; disability insurance (86%); life insurance (85%); prescription coverage (83%); employee assistance or wellness program (73%); and mileage reimbursement (63%)
Nearly all CFPs (98%) surveyed cited having access to defined contribution plans including 401(k)s. Some also cited access to other deferred compensation including profit sharing (42%), stock options (17%), employee stock option plans (8%) and pension plans (6%).
The report notes that CFPs are almost evenly split between those working for a company (52%) and those who are self-employed business owners or equity partners of a company (48%). The distribution of CFPs working in companies of different sizes is:
Fewer than 5 employees, 29%
5-20 employees, 27%
21-50 employees, 8%
51-100 employees, 4%
More than 100 employees, 32%
What’s In Their Wheelhouse
The CFPs surveyed say they offer a range of services, including wealth management/investment planning (93%), comprehensive financial planning (92%), retirement planning (87%), estate and tax planning (65%) and risk management/insurance (51%). Nearly half of the CPFs cited their primary business focus as comprehensive financial planning (45%) or wealth management/investment planning (42%). Only 10% of CFPs listed retirement planning as their primary focus.
Financial Planner Compensation
The CFP Board research also breaks out more details regarding compensation for the financial planning profession in general, though not specifically for CFP professionals. According to the report, the average components of financial planners’ compensation are annual base salary (35%), annual variable pay (44%), company profits (18%) and profit sharing (3%).
Financial planners with supervisory duties earn more based on the number of employees they direct. Median total compensation in 2023 for financial planners with no supervisory duties was $136,000, far below that of financial planners overseeing 1 to 5 employees ($231,000) or six or more employees ($400,000).
The type of business a financial planner works for also makes a big difference in earnings, according to the CFP Board study, which lists these total compensation averages for 2023:
Wirehouse/brokerage, $230,500
Independent broker/dealer, $225,000
Hybrid RIA, $215,000
Bank, $200,000
Registered investment adviser (RIA), $161,700
As expected, financial planners with more experience earn more: More than 20 years ($325,000), 11 to 20 years ($225,000), 5 to 10 years (($150,000), less than 5 years ($103,000).
Research firm Industry Insights collected compensation data for the CFP Board study during mid-April to mid-May 2024. It received responses from 1,455 CFP professionals and financial planners who don’t hold CFP certification.
In a four-decade career in journalism, Ed Prince has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News.
