Do financial advisors have a base salary?

Many financial advisors get paid a base salary plus any performance-based bonuses they may have earned that year. However, it really depends on whether the financial advisor is employed by a large company or is a self-employed registered investment advisor (RIA).

In 2017, the median annual salary for financial advisors was $90,530, while the highest-paid earned more than $200,000. Many banks and brokerage firms compensate employees with a base salary, then add bonuses for bringing in new client accounts or selling certain products over others.

Financial advisors can earn a simple commission for selling financial service products, such as real estate, stocks, insurance or loans. However, they may also receive a fee for developing a financial plan for clients on top of receiving commission on the products they sell. Companies such as AIG, Ameriprise, Wachovia and UBS generally pay employees on commission.

Financial advisors who get paid on a fee-only basis are usually self-employed RIAs. These self-employed financial advisors can charge an hourly fee, a flat fee or a retainer fee for their services. With an hourly fee, clients simply pay for the amount of time their financial advisor spends working on their case. Financial advisors can also set a flat fee for certain packages of financial services. A retainer fee is based on the size or value of the assets the financial advisor handles for the client. In most cases, the financial advisor charges a certain percentage of the assets he handles or a percentage of the client's net income.

(For related reading, see "How Your Financial Advisor Gets Paid.")