Question: What financial advisor field pays the most money?
I want to know which field being a financial advisor pays the most money (hedge funds, portfolio managers, private wealth financial advisor, etc.)
Also, I've heard that the retention rate is extremely high in that over 80% of financial advisors quit by their 4th-5th year. So if you find out financial advisor/planning isn't right for you, what other lucrative fields can you go into with a bachelor's and MBA degree without necessarily having to start at the low end again making about $40,000??? If you've spend the last 4-5 years as a financial advisor, and don't have "work" experience as a financial analyst, controller, etc. what jobs can you transfer into (at a decent salary) and still work your way up??? Thanks for any help
Answer:
In general, I would avoid the use of the term "financial advisor" unless you're specifically referring to someone who works in private wealth management at a retail broker or registered investment advisor (RIA). People who work at hedge funds or in investment research (portfolio management) don't use this term to refer to themselves.
I think you mean to say that the TURNOVER rate is extremely high? That's probably true for people who work for the least supportive retail investment firms (e.g., Ameriprise, Primerica, Northwestern Mutual). But I think turnover is low among the more supportive firms (e.g., Edward Jones, Raymond James, Morgan Stanley Smith Barney, UBS). More support=more training on how to build your book of business. All of these positions at retail brokers are very sales-driven. That is, your salary and longevity at the firm are dependent on how good you are at selling your advisory services. If you want to be handed a book of business, you can go work for one of the big mutual fund companies (e.g., Fidelity, Vanguard) for a much lower salary than the typical FA who owns his own book of business. If I had to guess, I'd say that an independent FA earns $60,000-$200,000 per year, with the average being $90,000, but a "staff" FA (at a mutual fund company) probably earns $50,000-$70,000, with the average being $60,000.
Hedge fund and investment analysis is an entirely different line of work. Hedge fund analysts (with elite MBA degrees) start off making $140,000 or more, and the sky is the limit. And their turnover is very low because it's great work--fun and lucrative--except when your fund explodes due to do poor investment decisions :(
Portfolio management is like "hedge fund lite". Similar type of work, but lower pay (starting salary in the $120,000 range for a newly minted MBA). Turnover here is also very low.
If you get an MBA degree at good program, then "corporate finance"--that is, working in the finance department of a large non-financial-services company--is also a great option that pays well. Business development finance is the function of evaluating the profitability of operational decisions (should we build a new factory, launch a new product, etc.?). Corporate development finance is the function of evaluating mergers and acquisitions (should we buy our competitor, sell a business unit, etc.?). These jobs are plentiful (relative to hedge fund and portfolio management jobs), and typically start out paying $90,000-$110,000 for someone with an MBA degree from a good program. And burnout is very low.
Unless you have an ivy league degree, you will not break into many of the above stated fields.
Most financial planners quit because of how they are compensated (id est: commission on sales of insurance and financial products.)
Capital management and financial planning (CFP/CFA) offer high rewards, often in the 100k+ field.
You might look into investment banking, underwriting, and being a private accountant (CPA).