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Broker Report Card
Broker Report Card 2014: Compensation Report

Broker Report Card 2014: Compensation Report

Let the Good Times Roll

The rebounding economy has been good for advisors, with 80 percent of those surveyed in our 24th annual Broker Report Card reporting a boost in assets under management in 2014. Advisors reported an average of $126 million in AUM, an increase of about 13 percent from a year ago.

Though Edward Jones advisors managed the least amount of assets, with just 9 percent reporting AUM of $200 million or more, the firm also saw the most growth in the last year at 19 percent.

Morgan Stanley advisors also experienced solid growth at 15 percent, bringing their average AUM to $151 million, the highest of the six firms we surveyed. More than half of Morgan Stanley’s advisors said they managed at least $200 million worth of assets.

Advisors with UBS Wealth Management Americas reported the least growth at just 10 percent, though their average of $139 million in AUM was still the third-highest. Twenty percent of UBS advisors said their total AUM remained the same this year as 2013, while 9 percent said their AUM actually decreased, more than any other firm.

Join the Club

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In last year’s Broker Report Card, only Morgan Stanley advisors reported average gross production of more than $1 million. In 2014, Morgan Stanley advisors still produced the most despite a slight decrease, but Merrill Lynch and UBS joined them in the “more-than-a-million” club.

Merrill Lynch advisors improved 15 percent from last year’s survey to an average gross production of $1.01 million, while UBS advisor production was up 20 percent to $1.03 million.

Commission vs. Fees

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For the fifth straight year, commissions continued to be less of a factor in advisors’ total compensation. In 2014, commissions only accounted for 36 percent of advisor compensation, slightly down from 37 percent last year and a healthy distance away from 44 percent in 2010.

While they took a slight step back from last year, asset-based fees still account for more than 50 percent of advisors’ books of business. Advisors also reported that salaries made up an average of 12 percent of their compensation, up from 10 percent last year.

“Fees are definitely the direction the business is going in and we see no reason that’s going to slow down,” said Bing Waldert, director of Cerulli Associates.

Edward Jones advisors had the most commission business, with commissions accounting for 56 percent of total compensation. At the opposite end of the spectrum, Merrill Lynch advisors had the least commission business, making up 28 percent of their paychecks.  

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