Your Financial Adviser Got a Raise. Did You?

Last Updated Jul 13, 2009 10:14 AM EDT

Maybe you didn't have a very good 2008. I sure didn't, and neither did a lot of people, including auto workers, journalists, realtors, bankers, manufacturers and importers and exporters.

But financial advisers did just great. In a survey, they reported their income went up to up to $215,345, on average, from $195,394 the year before. That' s right. In a year in which their clients lost more money than in any 12 month stretch since the Great Depression, the average financial planner got a 10% raise.

The data come from the 2009 Survey of Trends in the Financal Planning Industry, jointly produced by the College for Financial Planning and financial market research firm Cerulli Associates. I asked Bing Waldert of Cerulli and Jesse Arman of the College how planners could see their income go up when their clients' assets were crashing. They weren't sure, but were happy to speculate. Maybe it's "survivorship bias." (A Darwinian skew towards more established and richer planners because the crisis put weaker ones out of business.) Maybe customers required a lot more handholding, and the planners charged for it. Maybe, Waldert suggested, some survey respondents just didn't know how much money they made and overestimated. A lot of ordinary people do that--although one would hope that financial planners would be more on top of things.

Other things worthy of note in the survey::

* One third of planners have been in the business less than 10 years. Which suggests that your planner has been advising investors for fewer years than you have been investing.
* More than half of the planners in the sample were over 50. And so will be retiring about the same time as their baby boomer clients reach prime financial planning age. More than three quarters of clients are over 50. Message to job market: Career opportunity!
* More and more of them get most of their money from fees, not commissions. From the client's point of view that's a better model because it means your planner can make a living off you without selling you investments you might not need. But planners say that clients resist paying explicit fees for services like complete financial plans. (The average cost for such a plan: $3,600.) Imagine that.
* About two-thirds of planners aim for clients with assets of $250,000 to $1 million A lower sweet spot than usually suggested. But if you're at the low end of that range, expect to encounter planners whose livelihood still largely depends on selling you financial products and pocketing the commission.
And then there's that mysterious raise, which makes planners' enviable income even more enviable because unlike yours, I suspect, it's going up. Not to begrudge planners, especially Jill Schlesinger, Robert Pagliarini, Allan Roth and Charlie Farrell, who blog on this site. They're worth that average salary and much more besides. But the survey reinforces an idea that ought to be obvious. The best way to get rich in the long run isn't to buy investments. It's to sell them or manage them for everyone else.