The tight labor market has made it more difficult for some companies to secure top talent. Even financial advisor firms are struggling to find new advisors as their workforce ages. Data from the J.D. Power U.S. Financial Advisor Satisfaction Study shows that between 2020 and 2022 the average advisor age rose from 54 to 57, increasing the urgency for firms to invest in a new generation of advisors.
Young financial advisors may fare better in some cities than others, however. In this study, SmartAsset examined data to identify and rank the best cities for young financial advisors to start their careers. We considered five different metrics related to the job situation for financial advisors and the demand for advisory services. For more information on our data and how we put it together, read our Data and Methodology section below.
This is SmartAsset’s third annual study on the best cities for young financial advisors to start their careers. Check out the 2021 edition here.
- Anchorage, Alaska leaps into first place. Anchorage jumped into first place this year, after previously ranking as the 50th-best city for young financial advisors to start their careers. This is largely due to a large jump in average financial advisor earnings in the greater Anchorage metro area ($100,710 vs. $148,140).
- Young financial advisors tend to spend less of their income on housing. According to the Department of Housing and Urban Development (HUD) guidelines, residents in cities are considered housing cost-burdened when they spend more than 30% of their income on housing costs. Comparing average rent to average financial advisor earnings, we found that most financial advisors pay significantly less than 30% of their income on housing in all 100 cities. In fact, the study average is 11.06%.
1. Anchorage, AK
Anchorage, Alaska - which jumped from No. 50 in last year's edition of this study to No. 1 this year - ranks in the top 25% of cities for four of the five metrics we considered. It has the seventh-highest average earnings for financial advisors ($148,140) and the fifth-lowest rent as a percentage of average advisor earnings (6.51%). Additionally, demand for advisory services is likely high given the large percentage of households earning $200,000 or more (10.8%) and percentage of the population nearing retirement (30.9%).
2. Fremont, CA
Across all 100 cities in our study, average earnings for financial advisors are highest in Fremont, California, at $161,010. Fremont is also home to the highest percentage of households earning $200,000 or more annually. According to Census Bureau data, that figure stands close to 32%. Additionally, Fremont has the 10th-highest percentage of the population between the ages of 45 and 64 (32.4%).
3. Plano, TX
Plano, Texas ranks highest for financial advisory demand metrics. Nearly 16% of households in this city earn $200,000 or more (ninth-highest) and over than a third of Plano's population falls between the ages of 45 and 64 (second-highest).
4. Portland, OR
Portland, Oregon ranks best for the metric: financial advisor search volume relative to the population. Using data from SmartAsset’s financial advisor matching tool, we found that relative to population, Portland residents search for financial advisors 1.28 times more often than the average across all 100 cities in our study.
5. Albuquerque, NM
Financial advisors in Albuquerque, New Mexico earn an average of $126,730 annually - the 22nd-highest salary in our study. Beyond that, Albuquerque ranks in the top fourth of cities for two additional metrics. Median annual rent in the city makes up less than 6% of average financial advisor earnings. Moreover, SmartAsset data shows that Albuquerque residents search for financial advisors 1.11 times more often than residents elsewhere.
6. Seattle, WA
Known for its high cost of living, Washington’s Seattle takes the sixth spot in our study. Though rent is higher than other cities, the typical financial advisor still pays less than 11% of their salary on housing. Additionally, average financial advisor earnings are eighth-highest in our study, at $147,880, and Seattle is home to the seventh-highest percentage of households earning $200,000 or more annually (19.6%).
7. Tulsa, OK
The average financial advisor in Tulsa, Oklahoma earns about $118,700 annually. Young financial advisors will additionally have a low housing payment on average relative to their salary. Median rent in the area makes up only 6.08% of average financial advisor earnings – the third-lowest rate in our study.
8. Louisville, KY
Louisville, Kentucky ranks in the top 30 cities for three metrics. It has the 15th-best rent as a percentage of average financial advisor earnings (7.43%), the 29th-highest financial advisor search volume (1.01 times more often than residents elsewhere) and the 12th-highest percentage of the population nearing retirement (32.3%). The average financial advisor in the city earns about $115,600.
9. Chesapeake, VA (Tie)
The typical financial advisor in Chesapeake, Virginia earns upwards of $121,300 on average. Additionally, more than 33% of the population is between the ages 45 and 64 - the fourth-highest percentage in our study. Chesapeake falls farthest behind when it comes to the metric rent as a percentage of average financial earnings. Its higher-than-average rate (11.53%) means that young advisors may have slightly less disposable income outside.
9. Richmond, VA (Tie)
Richmond is the second of two Virginia cities that make it into our top 10. The average financial advisor in Richmond earns almost $132,700, spending less than 9% of their income on rent. Additionally, Richmond has the ninth-highest financial advisor search volume in our study, with residents searching for financial help 1.79 times more than the average American.
Data and Methodology
To find the best cities for young financial advisors to start their careers, SmartAsset looked at data for 100 of the largest cities in the U.S. We compared those cities across five metrics:
- Average financial advisor earnings. This is reported at the metro area level by the Bureau of Labor Statistics. Data is for May 2021.
- Rent as a percentage of average financial advisor earnings. This is the median annual rent divided by average financial advisor earnings. Data comes from the Census Bureau’s 2020 5-year American Community Survey and the Bureau of Labor Statistics.
- Financial advisor search volume relative to population. This is the number of searches for financial advisors in each city relative to population compared to the average search volume for financial advisors across the 100 cities in our study. Data comes from SmartAsset’s financial advisor matching tool.
- Percentage of high-earning households. This is the percentage of households earning $200,000 or more. Data comes from the Census Bureau’s 2020 5-year American Community Survey.
- Percentage of the population nearing retirement. This is the percentage of the population between the ages of 45 and 64. Data comes from the Census Bureau’s 2020 5-year American Community Survey.
We ranked each city in every metric, giving full weighting to each. We then found each city’s average ranking and used the average to determine a final score.
Looking for a Financial Advisor?
- Our tool makes it easy to find the right financial advisor that fits your needs. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Do your research on financial advisor fees. Financial advisor fee structures are varied. Most are either fee-only or fee-based. Fee-only advisors charge based on the services they offer while fee-based advisors make money by charging a combination of fees and earning commissions on investment products. For more information on the two, check out our complete guide here.
Questions about our study? Contact us at email@example.com
Photo credit: ©iStock.com/filadendron