Effective Financial Advisor Compensation in Credit Unions

Effective Financial Advisor Compensation in Credit Unions (May 2014)

Advisor compensation plans are designed to incentivize performance and align the Advisor’s goals with the priorities and values of the investment services business.  But how do the various components of the compensation plan impact the Advisor’s production and the performance of his or her firm?  To what extent are goals and incentives effective at shaping Advisor behavior?  And in what incentive areas should a firm target its incentive dollars to get the best results?

CUNA Brokerage Services, Inc. commissioned Kehrer Bielan Research & Consulting to identify the most effective Advisor compensation plans in credit unions.  For this engagement, the KBR&C research team assembled Advisor compensation plans from 34 credit unions and identified how the plans differed in terms of whether:

  • Payout is based on the most recent month or the past 6 to 12 months

  • Payout is calculated on gross revenue or net revenue

  • There is a gross salary or recoverable draw

  • There are special incentives to encourage advisory or life insurance business

  • There are different plans for Senior Advisors, Junior (Associate) Advisors, second floor Advisors, or Advisors embedded in Wealth Management

The incentive plans were also classified by the following:

  • Effective payout at various production levels taking into account any base salary

  • Number of grid levels

  • Production at which the payout reaches 40%

  • Top grid payout

We then examined how each of these incentive plan components impacted Advisor productivity and product mix, recruitment and retention, and the revenue and profit penetration of the firm.

This is the first study to analyze how the components of an Advisor’s compensation plan impact performance of the Advisor and the investment services business.

Download the study compliments of CUNA Brokerage Services, Inc.



This study was published under Kehrer Bielan Research & Consulting’s previous name. You will see references to Kehrer Saltzman & Associates / “KSA” throughout the text.