Considering a career where you’re forsaking your typical earned salary for a salary advance can have you feeling a bit uneasy.
Maybe that’s where you’re at as you read this.
The success of the firm over the decades-long journey at Consolidated Planning has been possible because of our belief and investment in our people and our advisors. Just as advisors prioritize what’s best for their clients, we make it a point to prioritize what’s best for our advisors.
If you think becoming a financial advisor could be the right career choice for you, we want you to be armed with the knowledge to be best prepared in what that career looks like. This article will help you understand what a salary advance is, how it functions, and what you can expect when receiving a salary advance, to decide if this compensation structure is best for you.
What Is A Salary Advance?
Your salary advance is just that, an advance on your salary.
Oftentimes there is a negative connotation or even stress associated with a salary advance. However, if you’re working with the best firm for you, this shouldn’t be the case.
A salary advance can provide a sense of stability and predictability in an industry where the income stream can vary from month-to-month and year-to-year.
How Does A Salary Advance Work For Financial Advisors?
Like any interview process, your salary advance will be a normal part of your discussions and negotiations and will be agreed upon before any formal next steps.
Together, you and your chosen firm will work to determine your salary advance based on two aspects:
- Your track record
- Your potential
Ultimately, deciding on your salary advance is up to you. After all, this is your career.
However, a firm with your best interest in mind, will likely not push new advisors to commit to a salary that will cause any unnecessary stress or worse, failing in your first year.
With your salary advance, you can expect consistent income, each and every month. But throughout the timeline of your pay, there will be certain earnings requirements to continue to receive that advance.
For example, let’s say you’re a new advisor at Consolidated Planning. Prior to day one with us, you selected the salary of $5,000/month based on the expectations and what you’re comfortable with. You would then receive $2,500 on the 15th of the month and $2,500 on the 30th of the month for consistent cash flow.
So what does that look like for you?
- Each payroll cycle: If you’ve earned more in fees than what we’ve paid you in your salary advance, then you can receive the excess.
- At the end of your first twelve months: Your salary advance earnings should, at a minimum, align with your earnings. Ideally, your total earnings are greater than your total advances. Anything above and beyond that will be paid to you.
Now you might be wondering if you owe this back.
The salary advance is our risk, not yours.
Should you not be a fit you don’t owe the money back – much like a salary. For this reason we don’t use the word ‘draw’ to describe these salary advances.
Is Earning A Salary Advance Right For My Career?
While earning a salary advance is a very common pay structure in the financial advising industry, the way a firm approaches it can be vastly different.
Ultimately, determining how the firms that you’re evaluating address your pay structure can help you decide the best firm for you as a new financial advisor. Here’s a few questions to ask yourself:
- Are they guiding you in making the best decision for the trajectory of your career?
- Are they being up front in what will be expected of you to reach and exceed your advance?
If you have the determination to build a practice, your next step is to evaluate if the reward of this career is worth the perceived risks.
Reach out to our recruiters to discuss how our salary advance works in more detail.
Exp. 3/2025 2023-152542
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