What Advisor Comp Changes Say About Your Firm
Firms rarely stand up in front of advisors and say, “We’re changing direction and priorities.” They do something quieter. They change the comp plan.
And then they act surprised when advisors start asking questions.
They shouldn’t be surprised. Comp plans are a message about what the firm wants you to become if you pay attention to incentives.
The single insight (what I want you to walk away with)
When the grid changes (especially around small households, hurdles, or team incentives), it’s a much more strategic prioritization than basic admin changes. So instead of reacting emotionally (or pretending you don’t care), read it like an owner.
Once you understand what it’s signaling, you can make a clean decision:
Lean in (if it matches your practice and your vision), or
Look around (if you’re being pushed into a game you don’t want to play)
Why this matters more than most advisors admit
Every advisor I talk to is busy serving clients, running teams, and doing the real work.
So when the comp plan hits the inbox, there’s a tendency to skim it, complain about it for a week, then go back to business. Here's the problem:
If you ignore the direction long enough, you wake up one day and realize you’re playing someone else’s game.
And the worst version of that is when the firm gradually turns your practice into something you don’t recognize… while paying you less for the privilege. I’ve joked before that it feels like shrinkflation.
What grid changes usually mean (whether they say it or not)
Let me translate a few common “changes” we’ve seen in the last few years into plain English.
1) Higher small-household minimums = “We want you up-market”
Sometimes this is framed as “segmenting service.” Sometimes it’s framed as “protecting advisor time.” Fine, but the real message is simple:
We want fewer small relationships and more big ones.
If your practice is intentionally built around a certain type of client like next-gen, dentists, executives with complex planning, but not giant AUM, this matters. It changes your economics, and it changes how your clients experience the firm. If you’re proud of serving certain people well, the grid can start punishing you for it. It’s an example of reduced control that serves the firm, not necessarily you.
2) New hurdles and growth awards = “We want momentum, not maintenance”
When plans add hurdles or tilt incentives toward growth metrics, it’s rarely about “fairness.”
It’s about keeping the advisor base moving. That can be a good thing if you’re in build mode.
It can be frustrating if you’re in a season where you want to deepen relationships, refine operations, or reduce chaos.
The point is: the firm is telling you what it values, regardless of its value to you.
3) Team incentives = “We want you tied together”
I’m not anti-team. Teams are real. They can be healthy, durable, and better for clients, but I’ve also seen team constructs used as Velcro. The more the plan nudges you into structures that reduce your independence or optionality, the more you should pay attention. Sometimes “team strategy” is also “retention strategy.” You don’t know it until you try to leave.
Here’s the part advisors miss
As I said earlier, compensation changes are much less about your dollars and much more about behavior. Most grid changes are designed to create one or more of these outcomes:
Advisors shift their marketing toward higher-AUM prospects
Smaller relationships get pushed to centralized service models
BDs/RIAs/Wirehouse consolidate teams, books, or households
Advisors spend more time “producing” and less time building infrastructure
Advisors become easier to manage as a population
Suddenly, even mega-indie firms (looking at you, LPL) look like they’re buying up businesses and incentivizing assets in the direction of the corporate firm.
A one-page way to decode your comp plan (no MBA required)
If you want to read your comp plan like an owner, here’s what I do.
Step 1: Circle what changed (not what stayed the same)
minimum household sizes
payout bands
hurdles
bonus criteria
team rules
any new “fine print”
Step 2: Ask “who wins?” and “who loses?”
Which type of advisor comes out better?
Which practice model gets punished?
Which client segment becomes less profitable to serve?
Step 3: Follow the operational consequences
If the grid pressures you to change your client mix, you’ll feel it in:
staffing
service model
technology needs
marketing approach
and eventually your identity as a firm
Step 4: Ask the question most people avoid
“Is the firm building the kind of business I want to be part of?” That’s the whole exercise.
Because if the answer is no, your options don’t improve by waiting.
What to do if you realize the message isn’t for you
This is where advisors get stuck. They’ll say, “Yeah, I don’t love it… but I don’t want disruption.” Here’s what I’ll tell you bluntly:
If you stay in a model that’s slowly misaligned, you don’t avoid disruption. You just postpone it and often make it more expensive.
So instead of dramatic decisions, I like practical ones:
1) Have one direct conversation internally. Just:
“What is the firm optimizing for?”
“Where do you want the advisor base to go?”
“How does this plan reward the kind of service and growth I’m actually doing?”
The answer will tell you a lot.
2) Run the parallel model
Even if you’re not leaving, model what life looks like elsewhere. There’s no decision in researching, but contrast is extremely helpful for you to understand what you’re looking for. The best decisions come from certainty, not frustration.
3) Decide your season
Some advisors are in a season of growth. Some are in a season of building infrastructure. Some are in a season of simplifying. If your firm’s comp plan is rewarding a season you’re not in, the tension won’t magically disappear.
Action questions (the ones worth answering honestly)
What is your firm trying to get you to do more of next year?
What is your firm trying to get you to stop doing?
Does that direction match how you want to serve clients?
If nothing changes for 3 years, will you be happier… or resentful?
Are you being paid more for the work you actually want to do—or less?
If you can answer those, you’ll know what to do next.
Read your comp plan like an owner, then decide if you want to be part of that future.