by Rebecca King
Editor's note: The following is an adapted excerpt from the 2010-2011 FPA Financial Planning Salary Survey.
If you're planning to hire new staff, students in financial planning programs and career changers are great options for recruiting entry- or mid-level positions. Knowing what expectations students and career changers have when it comes to job functions and compensation can help you in your hiring process.
Many individuals just entering the financial planning profession expect to start in a junior financial planner position (42 percent), followed by paraplanner (13 percent), CEO/owner/president (10 percent) and retirement specialist (10 percent).
They anticipate being involved in the development of the financial plan, client relationship management and investment strategy research/recommendations.
When they start their financial planning career, most students and career changers plan to hold a bachelor's degree (87 percent) and CFP certification (61 percent).
The majority expect to receive an annual salary, and one-third expect a bonus and/or incentive pay. These individuals anticipate receiving an average of $50,000 in annual pay when they start their careers.
Almost a third of students and career changers expect to have ownership options in the practice they will work for, with expectations that they will own 30 percent of the practice. This group also expects to receive a variety of benefits from the practice including insurance, retirement, time off and other benefits such as a flexible work schedule and continuing education opportunities, and most expect the employer to pay for 51 percent or more of these benefits.
Students and career changes imagine that helping people will provide the most satisfaction in their daily job, with the work environment expected to provide the least satisfaction. One interesting thing to note is that, to the contrary, a significant percentage of survey participants across job positions attribute their positive satisfaction to the work environment. This raises the question of why there are expectations that the work environment will not be satisfying to those who are planning to start their careers in this area.
Student and Career Changer Expected Job Functions
Financial planning/development of the financial plan: 94%
Client relationship management: 81%
Investment strategy research and recommendations: 61%
General office operations: 48%
New business development: 45%
Strategic planning for firm: 32%
Administrative assistance: 29%
Compliance management: 26%
Buy and sell securities: 23%
Firm operation management: 19%
Firm financial management: 13%
Staffing decisions including hiring and compensation strategy: 13%
IT needs: 13%
Student and Career Changer Compensation Expectations
Expected base salary: $51,200.00 (mean) $50,000.00 (median) $40,000.00 (25th percentile) $60,000.00 (75th percentile)
Expected annual bonus: $24,500.00 (mean) $20,000.00 (median) $15,000.00 (25th percentile) $25,000.00 (75th pecentile)
Expected annual incentive: $17,958.33 (mean) $10,000.00 (median) $750.00 (25th percentile) $25,000.00 (75th percentile)
Total Pay: $64,462.96 (mean) $50,000.00 (median) $40,000.00 (25th percentile) $80,000.00 (75th percentile)
Source: 2010-2011 FPA Financial Planning Salary Survey
FPA members who participated in the 2010-2011 FPA Financial Planning Salary Survey receive an electronic copy of the complete report, including access to an interactive compensation worksheet, free of charge. Non-participants may purchase electronic or print copies through the FPA online store. Visit www.ShopFPA.org for more information.