The present trend in advisor compensation of applying tweaks, rather than imposing major changes, seems likely to continue this year. Slow and steady seems to be the new normal.
“The large companies over the past 20 years have been evolutionary rather than revolutionary,” Andy Tasnady, a compensation consultant, told Financial Planning. Neither Tasnady nor others in the compensation field expect anything particularly innovative or controversial.
“I think that for the major wirehouses, grids will stay where they are. Changes will be around the margin,” recruiter Mark Elzweig told Financial Planning.
The reason for the absence of dramatic change? Competition.
Rising interest in RIAs and independent channels has pressured the major firms to embrace undramatic compensation systems.
And perhaps a conservative and predictable comp system is exactly what everyone needs after the pandemic-fueled unpredictability of last year. It’s safe to say that no advisor is looking for the sort of 30 percent cut in the bonus pool that AdvisorHub reported Merrill managers received.
