RIAs and Their Fat Payouts
Registered investment advisors continue to take home fatter paychecks than their counterparts at regionals and wirehouses, even after factoring in the RIAs' higher overhead.
According to research from Moss Adams, RIAs with a $1 million practice on average earn a total pre-tax income of $345,002. That's significantly higher than the $298,922 payout independent broker/dealers are garnering, and it far outpaces the $274,900 of wirehouse reps. Meanwhile, RIAs with $3 million practices are earning $1,009,507 on average; indie and wirehouse reps are at $868,267 and $615,000, respectively.
The disparity is explained by the fact that RIA services, which are fee-based and focused financial planning, appeal to high-net-worth customers better than the commssion services offered by many of their peers at big firms.
Further, as business owners, RIAs have more incentive to be profitable. “[RIAs] have to manage the firm to profitability or eat the loss,” says Philip Palaveev, senior manager with Moss Adams.
