Financial advisors offer varying fee structures with different types of compensation. In general, there are three primary ways advisors make money. They include client fees (usually charged either on an hourly basis or as a percentage of client assets under management), commissions for certain financial transactions and salaries earned by on-staff advisors. Fee-only advisors typically earn money through client fees while fee-based advisors can earn money through both client fees and commissions on investment transactions.
With those variable fee and compensation structures, the range of financial advisor salaries in the U.S. is wide. Nationally, financial advisors earn $122,490 on average; however, the 25th and 75th percentile wages are $59,450 and $157,020, respectively. In this study, SmartAsset determines the best-paying metro areas for financial advisors. We compared the 50 largest metro areas across four metrics: average financial advisor earnings, two-year change in financial advisor pay, financial advisor pay relative to average pay and housing costs as a percentage of average financial advisor pay. For more information on our data and process, read our Data and Methodology section below.
Key Findings
- Big pay gap across metro areas. The range of average financial earnings across the 50 largest metro areas is large – almost six figures, in fact. Average financial advisor earnings are lowest in the Oklahoma City metro area, at $72,640, and highest in the New York City metro area, at $169,850.
- West Coast metro areas fall behind. Not a single West Coast metro area cracks the top 10 on our list of best-paying places for financial advisors. San Diego-Carlsbad, California is the highest-ranking West Coast metro area, at No. 15, and two other California metros – Los Angeles-Long Beach-Anaheim and San Jose-Sunnyvale-Santa Clara – actually rank in the 10 worst-paying places for advisors. While financial advisors nationwide typically earn double what the average worker earns (2.18 times as much, to be precise), the ratios for this figure in the Los Angeles and San Jose metro areas are 1.66 and 1.26, respectively.
1. Pittsburgh, PA (tie)
Pittsburgh, Pennsylvania has the fourth-highest average financial advisor earnings ($160,350) and the seventh-highest two-year change in earnings for financial advisors (20.93%). Advisor pay in Pittsburgh is also high relative to all workers and housing costs in the area. The ratio of financial advisor earnings to average earnings for all workers is third-highest (2.95), and housing costs as a percentage of average financial advisor earnings is lowest overall (6.54%).
1. Richmond, VA (tie)
Richmond, Virginia ties with Pittsburgh, Pennsylvania as the best-paying metro area for financial advisors. Financial advisors in Richmond earn about $160,700 on average. This is almost three times the average earnings for all workers in the metro area. Additionally, housing costs make up only 8.94% of average earnings for financial advisors, the fourth-lowest rate in our study.
3. Birmingham-Hoover, AL
The Birmingham-Hoover, Alabama metro area ranks second in the study for two metrics: ratio of average financial advisor earnings to average earnings for all workers (3.00) and housing costs as a percentage of average financial advisor earnings (7.31%). BLS data shows the average financial advisor earnings in this metro area are about $153,100, the seventh-highest across all 50 metro areas.
4. Virginia Beach-Norfolk-Newport News, VA-NC
Average financial advisor earnings in the Virginia Beach metro area are the fifth-highest in the study ($158,860). This is 25.76% higher than in 2018 and 3.05 times higher than the average earnings for all workers. Median annual housing costs make up less than 10% of average financial advisor earnings.
5. Minneapolis-St. Paul-Bloomington, MN-WI
Average earnings for financial advisors in the Minneapolis metro area grew significantly over the past two years. In 2018, the average financial advisor earnings in the area stood at about $100,400. The 2020 earnings figure was roughly $161,000 – or more than 60% higher. Minneapolis-St. Paul-Bloomington also has the seventh-highest ratio of financial advisor pay to average worker pay (2.57) and ranks 10th-lowest for housing costs as a percentage of average advisor earnings (9.77%).
6. New Orleans-Metairie, LA
Like in the Minneapolis metro area, financial advisor pay is rapidly rising in the New Orleans metro area. From 2018 to 2020, average earnings for financial advisors grew by 45.92%, the second-biggest uptick in our study. The New Orleans metro area also ranks in the top five metro areas for two other metrics: financial advisor pay relative to average worker pay (2.83) and housing costs as a percentage of financial advisor pay (8.24%).
7. Chicago-Naperville-Elgin, IL-IN-WI
The Chicago metro area ranks in the top 15 metro areas for all four metrics in our study. Average financial advisor pay is $145,890, almost 12% higher than it was in two years previously. Moreover, advisors make 2.42 times more than the average workers and median annual housing costs make up less than 11% of average advisor earnings.
8. Charlotte-Concord-Gastonia, NC-SC (tie)
On average, financial advisors in the Charlotte metro area earn $146,650. Census Bureau data shows that median monthly housing costs across both homeowners and renters are about $1,100. As a result, housing costs make up only 9.01% of the average financial advisor earnings, which is the fifth-lowest rate in our study. Additionally, financial advisor pay relative to average pay is the sixth-highest overall (2.65).
8. Cincinnati, OH-KY-IN (tie)
From 2018 to 2020, the average earnings for financial advisors in the Cincinnati metro area rose by 17.95%, the ninth-largest increase in our study. With that, the average financial advisor earnings in the area are almost $122,200, 15th-highest overall. Cincinnati also ranks in the top 15 metro areas for two other metrics: financial advisor pay relative to average pay (2.26) and housing costs as a percentage of financial advisor pay (9.72%).
10. Indianapolis-Carmel-Anderson, IN
The Indianapolis metro area rounds out our list of the 10 best-paying metro areas for financial advisors. In 2020, advisors in the area earned roughly $125,600 on average, or about 4% more than they did in 2018. Additionally, this metro area has the 10th-highest ratio of average advisor earnings to earnings for all workers (2.37) and the sixth-lowest housing costs as a percentage of average advisor earnings (9.41%).
Data and Methodology
To find the best-paying places for financial advisors, we looked at data on 50 of the largest U.S. metro areas. We compared those cities across four metrics:
- Average financial advisor pay. This is average financial advisor earnings. Data comes from the Bureau of Labor Statistics’ May 2020 Occupational Employment Statistics release.
- Two-year change in financial advisor pay. This is the percentage change in average financial advisor earnings from 2018 to 2020. Data comes from the Bureau of Labor Statistics’ May 2018 and May 2020 Occupational Employment Statistics releases.
- Financial advisor pay relative to average pay. This is the ratio of average financial advisor earnings to average earnings for all workers in the metro area. Data comes from the Bureau of Labor Statistics’ May 2020 Occupational Employment Statistics release.
- Housing costs as a percentage of financial advisor pay. This is the median annual housing costs divided by average financial advisor earnings. Data comes from the Census Bureau’s 2019 1-year American Community Survey and the Bureau of Labor Statistics’ May 2020 Occupational Employment Statistics release.
We ranked each city in every metric, giving an equal weighting to all four metrics. We then found each metro area’s average ranking and used that average to determine a final score. The metro area with the best average ranking received a score of 100. The metro area with the lowest average ranking received a score of 0.
Tips for Growing Your Financial Advisory Business
- Let us be your organic growth partner. One way financial advisors can earn more is by expanding their client base. Our research shows that many new investors are looking for financial advisors; between March and August of 2020, online searches for the term “financial advisor” jumped by nearly 20%. If you are looking to capitalize on increased demand for financial advice, take a look at SmartAsset’s SmartAdvisor platform. We match certified financial advisors with validated, high-intent clients throughout the U.S.
- Expand your radius. SmartAsset’s recent survey shows that many advisors expect to continue meeting with clients remotely following COVID-19. Consider broadening your search and working with investors who are more comfortable with holding virtual meetings and/or spacing out in-person meetings.
Questions about our study? Contact us at press@smartasset.com
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