How much do financial advisors make per client?

1 min read by Unbiased team Last updated January 23, 2025

Uncover the factors influencing financial advisor salaries, from experience and certifications to geographic location and client demographics.

Summary

  • High-net-worth clients and complex services, such as estate planning, often generate higher fees per client.

  • Advisors in metropolitan areas tend to earn more due to greater demand and affluent client bases.

  • Building a niche market, leveraging technology, and fostering client retention are key strategies to increase earnings.

How are financial advisors paid?

Financial advisors' salaries differ from typical salaried structures as they generally earn their income through different compensation models, each influencing how much they make per client. The most common approaches are fee-only, commission-based, or a hybrid structure.

Fee-only

In the fee-only model, advisors charge clients directly for their services, typically as a percentage of assets under management (AUM), a flat fee, or an hourly rate.

According to industry standards, AUM fees generally range between 0.25% to 2% annually.

For example, an advisor managing $1 million in client assets might earn $10,000 annually from that client. This model provides transparency and aligns the advisor's success with client performance, but it can be challenging to scale without high-net-worth clients.

Commission-based

In commission-based models, advisors earn by selling financial products, such as insurance policies, mutual funds, or annuities.

A mutual fund with a 5% upfront commission, for example, could generate $5,000 on a $100,000 investment. This model offers significant upfront earning potential, though critics argue it may present conflicts of interest.

Hybrid approach

Many advisors now use a hybrid approach, combining fee-based services with commissions. This structure diversifies income sources while offering flexibility in client services. However, careful management is required to ensure ethical practices are followed.

Each model directly impacts financial advisor salaries, as advisors must balance scalability, income consistency, and client retention to optimize their earnings. Advisors using the hybrid model often find it an effective middle ground, ensuring consistent client fees while supplementing their income with commissions from suitable financial products.

Do financial advisors get paid a salary?

The structure of a financial advisor's salary often depends on whether they are employed by a firm or operate independently.

Advisors working for firms typically start with a base salary, which is a foundation for their earnings. As they gain experience and grow their client base, bonuses tied to performance metrics — such as acquiring new AUM or meeting sales goals — significantly boost their earnings.

Financial advisors' salaries vary considerably by experience. Entry-level advisors typically earn an average of around $50,000 per year, while mid-career professionals earn between $80,000 and $125,000. Highly experienced advisors often surpass $150,000.

Independent advisors, on the other hand, earn income directly from clients through fees or commissions. According to ZipRecruiter, the average salary for a financial advisor working independently is $102,134 annually, with top earners surpassing $150,000. These advisors have the flexibility to set their fees and commissions, but they also bear the full responsibility for business expenses and client acquisition.

Location significantly impacts financial advisor salaries, driven by cost of living, local wealth concentration, and economic activity.

According to the Bureau of Labor Statistics, states like Alaska ($226,650), New York ($205,870), and Louisiana ($184,950) lead in earnings due to affluent populations and demand for financial services. New York’s financial hub and Alaska’s smaller advisor pool serving high-net-worth clients explain these high wages.

Metropolitan areas often offer even higher salaries. Anchorage, Alaska ($284,020), and New Orleans-Metairie, Louisiana ($218,230), top the list due to concentrated wealth and fewer competing advisors. Financial hubs like New York ($213,810) attract clients with significant investable assets. Similarly, cities like Portland, Maine ($215,010) combine local affluence with a strong demand for advisory services.

The specific employment model also impacts a financial advisor's salary. Firm-employed advisors benefit from predictable salaries and bonuses, while self-employed advisors often have greater earning potential but higher operational risks.

Additionally, self-employed advisors with specialized client bases, such as those focusing on estate planning or high-net-worth investment strategies, often achieve significantly higher earnings due to the premium nature of their services.

What factors influence how much financial advisors make per client?

A variety of factors determine the earnings financial advisors receive per client.

One of the most significant is the advisor's experience and professional credentials.

Advanced certifications like the CFP (Certified Financial Planner) or CFA (Chartered Financial Analyst) increase earning potential by demonstrating specialized expertise. Advisors offering comprehensive or complex services, such as tax planning, estate planning, or business advisory, typically command higher fees.

Another critical determinant is the wealth of a client base.

High-net-worth clients can generate substantial revenue for advisors. Managing $5 million in assets at a 1% AUM fee, for instance, yields $50,000 annually from a single client.

Geographic location also plays a role.

Advisors in affluent or metropolitan areas often charge higher fees due to increased living costs and their clients' financial capacity. Advisors based in cities like New York, Los Angeles, or San Francisco can see a significant boost in per-client revenue compared to those in smaller or rural areas.

Additionally, client retention and satisfaction significantly impact financial advisors' salaries. Advisors who maintain strong client relationships secure recurring income and often benefit from referrals, which are vital for sustainable business growth.

Advisors with high client retention rates often achieve greater revenue consistency and can allocate more resources to attracting high-value clients. This retention also enables advisors to focus on delivering enhanced services, increasing their earning potential per client over time.

How much money does a financial advisor earn annually?

Annual financial advisor salaries vary widely depending on their career stage, client base, and the services they provide.

Entry-level advisors typically earn between $45,500 and $57,000 per year as they focus on building their client base and gaining experience. Mid-career advisors with established practices often earn between $80,000 and $125,000 annually.

Advisors specializing in high-net-worth clients or complex financial planning services can earn more than $150,000. Senior advisors with extensive experience and a loyal client base frequently earn $200,000 or more.

Earnings also differ by the type of clients served and the advisor’s service model.

Advisors focusing on high-net-worth clients generate significant fees. For example, managing $10 million in assets at a 1% fee produces $100,000 annually from a single client. By contrast, advisors serving middle-income clients might charge hourly fees, varying from $120 to $300 per hour, or on a retainer basis, ranging from $6,000 to $10,000 per year. These figures highlight the diverse earning opportunities available in the profession, depending on strategic focus and client demographics.

An advisor’s industry focus can also influence earnings.

For instance, advisors who specialize in retirement planning for business owners may charge higher fees due to the complexity of their services than those who focus on straightforward investment advice. Advisors who develop specialized expertise can position themselves as leaders in niche markets, further boosting annual earnings.

How can financial advisors increase their earning potential?

Several strategies can be used to boost the average salary for a financial advisor and grow their practices.

Expanding service offerings to include estate planning, tax strategies, or business advisory can attract high-value clients and diversify revenue streams.

Advisors who develop niche expertise, such as working with physicians, business owners, or retirees, often build a loyal and profitable client base. Leveraging technology, such as financial planning software or client relationship management (CRM) platforms, enables advisors to manage a larger number of clients efficiently without compromising service quality.

Client retention is another crucial factor in determining a financial advisor's income. Strong relationships with clients not only ensure consistent income but also lead to referrals, which can significantly expand an advisor's practice. Pursuing certifications like CFP or CFA enhances an advisor’s credibility and allows them to charge premium fees for specialized expertise.

Staying updated on market trends and regulatory changes also positions advisors as indispensable partners for their clients. By focusing on service quality, referrals, and expertise, financial advisors can significantly increase their earning potential and create sustainable, long-term revenue growth.

Work with Unbiased

There are multiple ways to increase financial advisor salaries, such as choosing the right compensation model or expanding expertise in areas like tax planning and estate strategies.

Building strong client relationships, focusing on retention, and leveraging technology can help you manage your practice more effectively while increasing your income. By staying adaptable and prioritizing your clients’ needs, you can create a thriving career that balances financial success with long-term professional growth.

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Writers

Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.