Financial Advisor’s First Year Income With Consolidated Planning: What To Expect

You’ve been exploring a new career as a financial advisor. So far, everything sounds great… but you can’t help but wonder, “how much will I earn in my first year as a financial advisor?” 

That makes total sense. After all, you wouldn’t jump headfirst into a job helping others manage their finances without at least thinking about how your personal finances would be impacted. Financial advisors have variable income based on their revenue production. So how much you’ll earn is entirely dependent on you.

Consolidated Planning has four decades of experience launching financial advisors’ careers. Our time tested planning process and advisor training program creates a prime environment for success. Our average inexperienced advisor earns $250,000 annually by their fifth year with us.

In this article, we’ll explain the basics of financial advisor compensation and share the average income of a first-year financial advisor at Consolidated Planning. By the end of the article, you’ll have the information you need to make an informed decision about the next steps in your career.

How Do Financial Advisors Get Paid?

Most financial advisors are paid based on the revenue they produce for their firm. Revenue is the commissions or fees they earn by working with clients. There are a number of factors that can impact financial advisor compensation, which can often be overwhelming, so for this article, we’ll focus on the basics of financial advisor compensation so you’ll have the knowledge you need to understand how you’ll be paid as an advisor.

At Consolidated Planning, our financial advisors generate revenue in three primary ways:

1. Planning Fees – Fees charged to clients in exchange for ongoing financial advice and guidance within the scope of the planning agreement.
2. Insurance Commissions – Commissions earned when clients purchase life and disability insurance based on advisor recommendations.
3. Investment Fees – Fees charged to clients based on assets under management. 

As you can see, your income as a financial advisor is based heavily on your work with clients, which brings us to our next question.

How Many Clients Do Financial Advisors Need?

At Consolidated Planning, we have found that an advisor needs to acquire 30 planning clients during their first year to be on track for long-term success. A planning client is defined as a client that is fully engaged in our planning process, not just a transactional product sale.

New advisors are often required to obtain 100 or more clients during their first year at more product-focused companies. Consolidated Planning emphasizes a comprehensive approach to working with clients. Advisors are encouraged to write insurance and investment business for all clients as appropriate and charge planning fees.

This well-rounded approach allows you to serve as a client’s one-stop shop for their financial needs. It also creates deeper, more meaningful relationships that drive more revenue.

Top 3 Solutions for New Financial Advisors Challenges

Financial advisors face two primary challenges. First, how will I get clients? Second, what will I do with my clients once I get them? Consolidated Planning helps advisors address both of these challenges.

Marketing Administrative Practice Management Solutions (MAPS)

The MAPS team at Consolidated Planning is dedicated to helping financial advisors market their practice to drive client acquisition. You’ll work with the MAPS team to create a 90 onboarding plan and then a twelve month business plan. MAPS then provides training and support to help you implement your plan. From turnkey webinars to going deep with niche marketing, MAPS is here to help you find quality clients.

Advisor Performance Group (APG)

Once you have taken a prospect through the initial open meeting and collected some basic data, APG is here to guide you through the next steps from a planning perspective. APG will take the data you provide and build a secure client website using our Living Balance Sheet software. This tool will create a financial scorecard for your client that you’ll use to measure progress toward your client’s goals. APG will coach you through the planning process to ensure you deliver advice aligned with our planning philosophy. 

New Business Hub

Paperwork isn’t necessarily a challenge for financial advisors, but it sure is a pain in the neck. At Consolidated Planning, we recognize that no one becomes a financial advisor to do paperwork all day. Let’s face it, finding clients and figuring out how to help them is enough of a challenge without adding paperwork. 

That’s why our New Business Hub exists, to help you maximize your time and reduce stress. We handle the paperwork for you, so you can focus on your client relationships and growing your practice.

What Will My Income Be As A Financial Advisor?

Your income during your first year as a financial advisor is based on your revenue production. Consolidated Planning has spent 40 years training new financial advisors and has seen that first year advisor income can vary wildly. Still, over time we’ve seen the averages play out, and the chief indicator of first year success is having 30 planning cases. 

30 Planning Cases

For our practice building playbook, you’ll need 30 cases during your first 12 months to be considered on track. A case is any individual, family, or business actively engaged in the planning process and agrees to do business with you. 

These 30 cases should generate $1,000,000 of new assets in fee based accounts. Due to the time it takes to get licensed and then bring in the accounts in year one, we don’t account for any income from these accounts during your first 12 months in this example. 

In our experience, about one-third of cases will pay planning fees. This amounts to the advisor about $13,320 of planning fees and $7,700 of income. 30 cases should generate about $80,000 of life/disability insurance premiums which will generate $64,000 of first year commissions when your new advisor subsidies are considered. 

The average compensation for a first year financial advisor at Consolidated Planning is around $71,700 when they have 30 planning cases.

Years Two And Beyond

As you move through your career, your income will begin to shift. First year insurance commissions make up a smaller percentage as investment and planning fees grow and your insurance renewal base builds. Income in year 5 is a three legged stool. $100,000 of income comes from investment and planning fees. $88,000 comes from first year insurance commissions and $60,000 from insurance renewals. However, the results in year 5 depend on consistent building in years one through four. 

As you can see, financial advisors have strong income potential from day one. When you’re ready to learn more about becoming a financial advisor and earning $250,000 per year within five years, download our practice building playbook here.

What Can I Expect During My First Year At Consolidated Planning?

As a financial advisor at Consolidated Planning, you can expect to earn an average of $250,000 annually by their fifth year with the company. This income is based on revenue generated through planning fees, insurance commissions, and investment fees earned through working with clients. 

New financial advisors at Consolidated Planning are expected to acquire 30 planning clients during their first year, while more product-focused companies may require 100 or more clients. Consolidated Planning offers resources such as the Marketing Administrative Practice Management Solutions (MAPS) team and the Advisor Performance Group (APG) to assist new advisors in acquiring and managing clients. Additionally, Consolidated Planning provides ongoing training and support to help financial advisors succeed in their careers.

Reach out to our team to receive a copy of our practice building playbook to see exactly how this career can become your reality.

 

 

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