Investment advisor associates play a key role at financial advisory firms. They are typically entry-level positions that support lead advisors. Understanding the salary range and pay factors for these roles can help those exploring investment advisor careers. This article will examine the typical base pay and total compensation for associate investment advisor roles. We’ll look at data on salary ranges from major metro areas in the U.S. as well as factors like firm type, assets under management, and experience that impact pay levels. With this information, individuals can better evaluate potential career paths and earnings potential in the investment advisory field.
Investment advisor associate salary overview
Investment advisor associate is an entry-level role at most financial advisory firms. According to salary data from Glassdoor, the average base pay for these positions is $55,517 per year. Total compensation including bonuses and profit sharing can range from $60,000 to $100,000+ annually. The associate investment advisor salary range depends heavily on the firm and compensation structure. At wirehouse brokerages like Merrill Lynch and Morgan Stanley, base salaries tend to be in the $60,000-$80,000 range. At independent RIAs, associates may start closer to $40,000-$60,000 in base pay but have more bonus potential. The largest factor affecting pay is assets under management (AUM). Associates who support advisors with more client assets have greater earning potential from bonus payouts and shared revenue. Geographic location also impacts investment advisor associate salaries. Those in major metro areas like New York and San Francisco earn 10-20% more in base and bonuses than counterparts in smaller markets.
Salary differences by firm type
There are significant differences in investment advisor associate pay by firm type and structure. At large wirehouse firms like Morgan Stanley, Merrill Lynch and Wells Fargo, base salaries for entry-level associate roles typically range from $60,000-$80,000. These firms recruit associates from top MBA and training programs so pay high base to attract talent. Bonuses are based on branch or team performance and add 10-30% typically. At independent registered investment advisor (RIA) firms, associate base salaries are often lower, frequently $40,000-$60,000. However, these RIAs pay out a larger share of revenues in employee bonuses. So associates at top-tier independent firms can earn $80,000-$120,000 or more including bonuses. The business model also impacts pay. Firms focused on investment management rather than commission-based trading tend to pay higher base salaries to associates. For example, wealth management RIAs like Creative Planning and Mercer Advisors pay $60,000-$75,000 base. But transactional broker-dealers pay associates commissions on trades and lower base.
Experience and assets under management drive earnings
While investment advisor associate salary ranges are impacted by firm type, the biggest drivers of pay are experience and assets under management (AUM). As associates gain skills and tenure, their compensation increases. Top performers can earn over $150,000 after 3-5 years. But the key factor is the AUM of the advisors supported. Associates supporting lead advisors with $500 million+ in AUM have greater earning potential. The associate shares in bonus pools and revenue payouts tied to those assets and production. Top advisors with $1 billion+ in AUM distribute millions to their associate team members. So associate pay is highly correlated to the lead advisor’s book of business. Top associates have potential to earn over $300,000 by supporting ultra-high net worth practices.
Higher pay in major metro markets
Location also impacts investment advisor associate salaries. Those working in major metro areas like New York, San Francisco, Chicago and Los Angeles earn 10-20% more in base and total compensation. This pay differential reflects the higher cost of living. But also the concentration of wealth. Associates in Manhattan for example support advisors managing multi-millionaire and billionaire clients. The largest markets also have more large wirehouse and independent RIA headquarters. This provides associates more options and leverage in negotiations. Smaller metro areas and non-urban locations pay less for investment associates. Though lower cost of living offsets some of the pay differences. For those willing to relocate to major metros, the career earnings potential is substantially higher.
Investment advisor associate salaries range from approximately $60,000-$100,000 including bonuses, with top earners exceeding $200,000. Pay is highest at major wirehouse firms and elite independent RIAs. But associate earnings potential comes largely from assets under management of supported advisors. In major metro markets advisors manage larger books, driving higher associate pay. With solid experience and performance, associates can progress into lead advisor roles and increase their incomes substantially.