Editor's note: The following is an edited excerpt from the 2010-2011 FPA Financial Planning Salary Survey.
Paraplanners in financial planning practices support the financial planning process through research, preparation for client meetings and the development/maintenance of client accounts. Paraplanners primarily focus on the development of the financial plan and client relationship management, though many also assist with general office operations.
According to data from the 2010-2011 FPA Financial Planning Salary Survey, which included 126 survey responses specifically about the paraplanner position, most paraplanners have a bachelor's degree and about one third have a life insurance license, hold a Series 7 license, and/or are a CFP certificant. On average, these individuals have five years of experience in the financial services industry with 25 percent having three years or less, and another 25 percent with eight years or more.
One-quarter of practices employ a paraplanner. On average, those firms employ one individual in this position, and the majority work full time for the practice. Only the largest firms, in terms of AUM and revenue, generally employ more than one individual in this position.
Salary, Bonus and Incentives
Most individuals in a paraplanner position receive a salary and half receive a bonus and/or incentive pay. Compensation does not vary as dramatically with this position as it does for other positions within a financial planning firm. Twenty-five percent receive $40,000 or less in total pay, and 25 percent receive $58,000 or more (see Table 1).
Table 1: Nationwide Paraplanner Compensation |
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|
Nationwide |
Salary |
Bonus |
Incentive |
Total Pay |
|
Percent who receive |
100.0% |
55.0% |
52.0% |
100.0% |
|
Mean |
$43,811.99 |
$4,086.51 |
$8,090.79 |
$48,716.95 |
|
Median |
$43,000.00 |
$3,200.00 |
$4,000.00 |
$47,250.00 |
|
25th Percentile |
$36,000.00 |
$2,000.00 |
$3,000.00 |
$40,000.00 |
|
75th Percentile |
$52,454.00 |
$5,000.00 |
$7,950.00 |
$58,000.00 |
Compensation for paraplanners usually increases with firm size. For example, the median total pay for a paraplanner at a firm with five or fewer employees is $41,000 per year. The median total pay for a paraplanner at a firm with 31 or more employees is $62,500 per year.
Compensation also tends to increase with the number of client households served by the firm. Median total pay at a firm that serves 50 or fewer client households is $45,000, while median total pay at a firm that serves 301 or more client households is $50,000.
On average, paraplanners receive higher compensation at firms that focus on investment management, as opposed to modular financial planning or comprehensive financial planning, but compensation does vary dramatically as seen with the 25th and 75th percentiles (See Table 2).
Table 2: Paraplanner Compensation by Practice Service Model |
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|
|
Mean |
Median |
25th Percentile |
75th Percentile |
|
Investment Management |
|
|||
|
Salary |
$48,692.86 |
$48,000.00 |
$36,000.00 |
$57,000.00 |
|
Bonus |
$4,816.67 |
$4,000.00 |
$2,000.00 |
$5,000.00 |
|
Incentive |
$4,266.67 |
$4,500.00 |
$3,300.00 |
$5,000.00 |
|
Total Pay |
$52,703.57 |
$54,800.00 |
$36,000.00 |
$60,000.00 |
|
Modular Financial Planning |
|
|||
|
Salary |
$46,187.50 |
$50,000.00 |
$34,000.00 |
$57,750.00 |
|
Bonus |
** |
** |
** |
** |
|
Incentive |
** |
** |
** |
** |
|
Total Pay |
$48,875.00 |
$52,000.00 |
$37,250.00 |
$60,250.00 |
|
Comprehensive Financial Planning |
|
|||
|
Salary |
$43,138.34 |
$43,000.00 |
$36,000.00 |
$50,000.00 |
|
Bonus |
$3,741.39 |
$3,000.00 |
$1,875.00 |
$5,000.00 |
|
Incentive |
$8,563.24 |
$4,000.00 |
$3,000.00 |
$8,500.00 |
|
Total Pay |
$48,230.25 |
$47,000.00 |
$40,000.00 |
$56,100.00 |
|
** Not enough information |
||||
Compensation for this position does increase with experience. The median total pay for a paraplanner with five years or less experience is $47,250, while those with six years or more of experience realize median total pay of $58,000. Survey results also show that compensation increases with certain certifications. For example, paraplanners with a CFP certification tend to make more than those with a life insurance or Series 7 license.
Retention, Turnover and Job Satisfaction
Individuals in a paraplanner position have been with their current firm an average of three years. However, 25 percent have been with their firm for a year or less and another 25 percent have been with their firm for five years or more.
Although turnover for the paraplanner position varies dramatically, 40 percent of firms have never experienced turnover in this position.
Overall, paraplanners are highly satisfied with their jobs, with more than half (65 percent) saying they are very or extremely satisfied. These individuals identify their work environment as the primary factor in their satisfaction, but many other aspects play a role as well.
|
Table 3: Paraplanner Job Satisfaction |
|
|
|
Percent |
|
Extremely satisfied |
31% |
|
Very satisfied |
35% |
|
Satisfied |
23% |
|
Somewhat satisfied |
8% |
|
Not at all satisfied |
4% |
|
|
|
|
Reasons for Satisfaction |
|
|
The work environment |
62% |
|
My compensation |
38% |
|
The training and development I receive or lack |
35% |
|
My daily tasks |
31% |
|
My coworkers |
31% |
|
The benefits the firm provides |
27% |
|
My supervisor |
27% |
|
The opportunity for advancement |
27% |
|
Other |
0% |
|
Small base size: 26 responses |
|
Learn More
FPA members who participated in the 2010-2011 FPA Financial Planning Salary Survey receive an electronic copy of the complete report free of charge. Non-participants may purchase print and electronic copies through the FPA online store. Visit www.ShopFPA.org for more information.
