Insights | 01.03.18
How Much Are Program Managers Paid?
There are almost 3,000 banks and credit unions offering investment services to their clients, and every one of them has a “program manager, “responsible for sales management, operations, compliance, and the business’s P&L. In smaller institution, program managers might be part-time producers. In larger institutions, they might have sales managers reporting to them.
Even though they are so numerous, and so important to the success of bank insurance and securities activities, there is little public information about how they are paid. Kehrer Bielan sought to rectify that knowledge gap by obtaining the actual compensation plans for program managers from 60 institutions that partner with 3rd
party broker dealers, who account for all but a few dozen of the institutions offering investment services. Then we matched how they are paid with their actual compensation, advisor headcount, advisor productivity, revenue and profit penetration, and other factors from our benchmarking surveys.
How much are they paid? The study -- Program Manager Compensation: When More Is Better
– answers that question from several perspectives. One of those perspectives is how much a program manager is paid per advisor. On average, that answer is $17,000. But, as you might expect, there is substantial variation around that average.
For example, for program managers earning $150,000, one earns only $4,000 per advisor, but another earns $39,000. Several others earn compensation between these 2 extremes, illustrated in the space between the two green diamonds.
Many factors influence this metric, such as economies of scale, individual advisor production and product mix. There are some program managers earning well above $17,000 per advisor. That could mean that the program manager’s compensation is high relative to his or her responsibility. Having recruited and managed very high producing advisors would mitigate this concern. Or, the firm might need more advisors to support the cost of the program manager’s role. For those well below $17,000 per advisor, the program manager might have too many advisors and needs more management help, or compensation is low for the size of the sales-force and responsibility. Of course there are more variables to the equation, but this data should help program managers identify the value proposition they bring for the compensation investment the firm makes.