Four ways to pay an adviser
There are 4 key incentive structures for advisers with massive differences. The same adviser managing a $1M book is paid $937,500 or $1,118,624 over five years, and only the incentive structure changes. See which is best for your firm.
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- What each structure costs you over five years
- The number a candidate compares between offers
- How each of the four models pays out
- What new business is still worth five years on
- A pay pathway from Junior Adviser to Head of Advice
- Two ownership options to offer your advisers
See All 4 Models Before Your Next Adviser Hire
Who this is for
Yes This is for you if…
- You're about to make an adviser an offer and want to see what a structure adds up to over five years before they sign.
- You're torn between a bonus and revenue share and want the dollars side by side, on the same book.
- A good adviser has taken a better-looking offer somewhere else, and you'd like to see how your structure reads over five years.
- You pay bonuses today and there's no profitability gate sitting in front of them.
- You've got an adviser ready for the next title and no pay plan yet for the role after it.
No Skip it if…
- You're outside Australian financial advice. The numbers assume 12% super and a recurring revenue book.
- You're only hiring support staff. The models are built around an adviser looking after a client book.
- You're after personal advice on your own plan. This is an illustration on gross figures, before personal tax.
Why this works
I ran the Talent function behind an advice firm that went from 9 people to 50 inside two years, and have recruited for firms right across Australia.
FAQ
Is it free?
Yes. One email address and it lands in your inbox. No card, no newsletter ambush.
Which structure is the cheapest for the business?
At the rates in the guide, the performance based bonus. It comes to $937,500 over five years, against $750,000 for base pay with no incentive. The hybrid is the highest at $1,118,624.
Does the choice of structure make much difference?
To the adviser, yes. Against the book it's a lot smaller than it looks. By Year 5 the four structures sit $42,956 apart on a book generating $1,316,707, roughly 3%. Over five years all four land between 15.7% and 18.7% of the revenue the adviser services.
Can I walk a candidate through it?
That's how it's laid out. The package values are cash plus super over five years, the way a candidate reads an offer, and the career pathway shows where the role goes after the one they're taking. I'd swap in your own package and book first, since this is an illustration.
What stops a bonus going out in a year the business can't afford it?
A profitability gate. I'd put one on bonuses so they're only paid when they're commercially sustainable for the business, and I'd look at compliance and risk gates alongside it.
Where do the numbers come from?
One worked model. A $150,000 package including 12% super, a $1,000,000 opening book, $120,000 of new recurring revenue a year and 95% retention, held the same across all four structures so only the incentive changes. Figures are gross, before personal tax. It's an illustration only, and your own book and rates will move the numbers.
What are the two ownership pathways?
An Employee Share Option Plan, which pays on growth in business value with no shares or voting rights. And equity or partnership, which is real ownership bought with the adviser's own capital, with distributions from 3 to 5+ years.
Is this only useful when I'm hiring?
No. The career progression pathway is for the advisers already on your team too, as they move from Junior Adviser to Head of Advice.