New Financial Advisor Transition Programs let you learn while you earn
No matter how you enter the field — as a recent college graduate pursuing your first career, a professional changing industries or an established financial services professional — we have a compensation plan designed to help you transition to your new role.
Entrepreneur (E-Bonus) Program
This program is designed to yield meaningful financial impact in your first year with Waddell & Reed while you learn and build your business. We will pay four quarterly bonuses -- in addition to your commission -- upon meeting very reasonable benchmarks that could result in a total bonus of $12,500 to $40,000.
Experienced Professional Program
As an experienced financial services professional, you will earn a stabilized income as you transition to Waddell & Reed. After meeting certain criteria, you will receive $3,000 or $4,000 per month for your first 12 months, with validation criteria. You also are eligible to receive escrowed commissions and applicable bonuses and service fees. Subject to executive approval.
Understand the components of your income
Learn more about the components that contribute to your total compensation plan. Two terms that will be helpful are:
Gross Dealer Concession (GDC) – The revenue paid to the brokerage firm from the sale of an investment or insurance product. 12b-1 service and distribution fees are included in the GDC calculation. Gross dealer concession is also referred to as gross revenue.
Incentive Volume Credit (IVC) – A proprietary calculation based on your sale of mutual funds, insurance products, fee-based programs and financial planning.
Commissions
The basis of your compensation is earnings generated from sales. Payout rates are highly competitive and vary by product.
| Product Type |
Average Payout Rate |
| Mutual Funds1 |
50% |
| Variable and Fixed Annuity Products1 |
50% |
| Variable Universal Life Products1 |
50% - 60% |
| Universal Life and Term Life Products |
50% - 60% |
| Fee-Based Programs2, 3 |
60% |
| Financial Planning |
60% - 80% |
| Service Fees |
20% - 80% |
1Investment-bonus eligible.
2Service fee eligible.
3MAP sales are eligible for a prepaid commission (three years of annual fees) at point of sale.
Service Fees (12b-1 fees or "trails")
Service fees are paid based on your clients’ assets. The larger your practice, the more time spent on client service, therefore the higher the service fee.
| Incentive Volume Credit |
Payout as Percentage of GDC for Service Fees 1 |
| |
Class A & Y Shares2 |
Class B & C Shares2
Ivy VIP Shares |
| $0 - $999,999 |
0% |
80% |
| $1,000,000 - $1,249,999 |
20% |
80% |
| $1,250,000 - $1,749,999 |
40% |
80% |
| $1,750,000 - $2,499,999 |
60% |
80% |
| $2,5000,000+ |
80% |
80% |
1For the purpose of service fees, GDC is calculated by multiplying your assets under management by 25 basis points.
2Waddell & Reed Advisors Funds, Ivy Funds, non-proprietary funds.
Distribution Fees on C Shares
You will receive an annual distribution fee of 55 basis points on shares that have been invested for more than one year.
Financial Planning Fee Income
You will earn fees for preparing and presenting FOCUSPlan®, our modular and comprehensive financial planning service. A client’s financial planning fee — either fixed or variable — is based on the plan’s level of detail, number of components and advisor eligibility.
| Financial Planning Revenue |
Payout Rate |
| $0 - $14,999 |
60% |
| $15,000 - $29,999 |
70% |
| $30,000+ |
80% |
Investment Bonus
Based on your sales production, you may qualify for an annual bonus. This bonus may make up a significant percentage of your overall compensation.
| Commissions1 |
Base Bonus |
Plus2 |
| $25,000 - $27,499 |
$3,000 |
0.0% |
| $27,500 - $44,9999 |
$3,500 |
22.5% |
| $45,000 - $64,999 |
$3,500 |
25.0% |
| $65,000 - $99,999 |
$3,500 |
27.5% |
| $100,000 - $134,999 |
$3,500 |
30.0% |
| $135,000 - $249,999 |
$3,500 |
35.0% |
| $250,000+ |
$3,500 |
37.5% |
1Based on commissions for products that are investment-bonus eligible.
2Percentage of investment base earnings over $27,500.
Professional Career Bonus
An additional bonus will be paid annually to the top 80 advisors. The qualifying group will be tiered and a bonus paid ranging from 5 to 10 percent of commissions. This group also will have an opportunity to receive an equity stake in the firm in the form of restricted shares of Waddell & Reed Financial, Inc. (NYSE:WDR)
Personal Office Support Program
You are welcome to establish an office in any of our branch locations at no cost. If you choose to operate from a personal stand-alone location, we offer direct financial support to establish and maintain your office.
| Total Career Sales Volume |
Annual Support Based on Qualification
Level1 for Annual Sales Convention1 |
| |
Achievement |
Honor |
Crest |
| $0 - $19,999,999 |
$0 |
$2,400 |
$4,800 |
| $20,000,000 - $39,999,999 | $2,400 | $4,800 | $6,000 |
| $40,000,000 - $59,999,999 | $4,800 | $6,000 | $12,000 |
| $60,000,000 - $79,999,999 | $6,000 | $12,000 | $18,000 |
| $80,000,000 - $99,999,999 | $7,200 | $13,800 | $21,000 |
| $100,000,000+ | $8,400 | $15,600 | $24,000 |
1Based on IVC.
Errors & Omissions (E&O) Insurance
E&O insurance covers your liability in the performance of professional services within the broker/dealer. Our group policy enables you to pay a significantly reduced rate versus acquiring an independent policy.
Fee Support and Reimbursement
Based on your level of production, you may qualify for reimbursement of initial licensing fees, licensing renewal fees and continuing education fees. In addition, based on minimum production requirements, we offer guidance, scholarship support and fee reimbursement for your pursuit of professional designations such as CFP®, CMFC®, ChFC®, CLF® and CLU®.
See the Compensation and Incentive Classic Advisor Guide for more detailed compensation information. This guide summarizes the commission and incentive compensation policies for Waddell & Reed’s independent contractor Classic advisors. Waddell & Reed, Inc. reserves the right to amend and administer its compensation and incentive policies in its sole discretion.
Personal Commitment Plus Prospecting Equals Greater Earnings
Experience has taught us that driving the right activity leads to success. Inherent in that truism is a mathematical best practice — 10-3-1. 10 represents the number of warm leads you need to contact to put 1 appointment with a prospective client on your calendar. 3 prospective client appointments lead to 1 client. Of course, 10-3-1 is a general rule, but a good one to keep in mind as you plan your activity, increase and fine tune your prospecting techniques and watch your fees and commissions grow.
| First-Year Financial Advisor Activity Model – Hypothetical Illustration |
|---|
| Total Payout |
$50,000 |
$75,000 |
$100,000 |
$150,000 |
| Activity1 |
| Warm Prospects Contacted (week/year) | 31.3/wk
1,500/yr | 34.4/wk
1,650/yr | 37.5/wk
1,800/yr | 40.6/wk
1,950/yr |
| Appointments Held | 3.1/wk
150/yr | 3.4/wk
165/yr | 3.8/wk
180/yr | 4.1/wk
195/yr |
| Clients Gained | 1.0/wk
50/yr | 1.1/wk
55/yr | 1.3/wk
60/yr | 1.4/wk
65/yr |
| Average Client Profile: |
| Mutual Fund Class A & Variable Annuities | $9,826 | $11,858 | $14,493 | $18,729 |
| Advisory Programs (MAP) | $8,974 | $13,054 | $15,598 | $26,331 |
| Financial Planning Fees2 | $400 | $400 | $400 | $400 |
| Life Insurance Premiums3 | $1,200 | $1,800 | $2,100 | $2,400 |
| Total Average Client Investment Over 12 Months | $20,400 | $27,112 | $32,591 | $47,860 |
1Activity assumes 48 weeks worked per year.
2Financial Planning Fees: assumes $400 per plan.
3Life insurance premiums are $100 per month at the $50,000 level, $150 per month at the $75,000 level, $175 per month at the $100,000 level, and $200 per month at the $150,000 level.
Earnings and Rewards Help Put Your Income Goal Within Reach
Commissions and service fees create the foundation of your annual income. This model illustrates the foundation and additional rewards, such as bonuses, that can help you build toward your goals.
| First-Year Financial Advisor Compensation Model – Hypothetical Illustration |
|---|
| Total Payout | $50,000 | | $75,000 | | $100,000 | | $150,000 | |
| GDC by Product Type: |
| Mutual Fund Class A & Variable Annuities | $28,250 | | $37,500 | | $50,000 | | $70,000 | |
| Advisory Programs (MAP) | $17,500 | | $28,000 | | $36,500 | | $66,750 | |
| Financial Planning Fees | $8,000 | | $8,800 | | $9,600 | | $10,400 | |
| Insurance Premiums | $14,400 | | $23,760 | | $30,240 | | $37,440 | |
| Service Fee Revenue | $1,458 | | $2,863 | | $4,025 | | $6,003 | |
| Total GDC | $69,608 | | $100,923 | | $130,365 | | $190,593 | |
| Incentive Volume Credit Equivalent1 | $1,751,455 | | $2,520,142 | | $3,246,938 | | $4,743,963 | |
| Commission Payout (as % of GDC): |
| Mutual Fund Class A & Variable Annuities | $14,125 | | $18,750 | | $25,000 | | $35,000 | |
| Advisory Programs (MAP)2 | $10,500 | | $16,800 | | $21,900 | | $40,050 | |
| Financial Planning Fees | $4,800 | | $5,280 | | $5,760 | | $6,240 | |
| Insurance Premiums | $7,200 | | $11,880 | | $15,120 | | $18,720 | |
| Service Fee Revenue | $875 | | $2,290 | | $3,220 | | $4,802 | |
| Total Commissions & Service Fees | $37,500 | 54% | $55,000 | 54% | $71,000 | 54% | $104,812 | 55% |
| Bonuses: |
| Investment Bonus3 | $0 | | $0 | | $3,000 | | $5,188 | |
| Entrepreneur Program4 | $12,500 | | $20,000 | | $26,000 | | $40,000 | |
| Total Bonuses5 | $12,500 | 18% | $20,000 | 20% | $29,000 | 22% | $45,188 | 24% |
| Total Payout (Commissions, Service Fees & Bonuses) | $50,000 | 72% | $75,000 | 74% | $100,000 | 77% | $150,000 | 79% |
| Plus: |
| Licensing Fees6 | $250 | | $250 | | $250 | | $250 | |
| OSJ/Compliance Fees7 | $3,480 | | $5,046 | | $6,518 | | $9,530 | |
| Health Insurance Subsidy8 | $9,090 | | $9,090 | | $9,090 | | $9,090 | |
| Convention Meetings/Trips9 | $2,500 | | $3,500 | | $3,500 | | $3,500 | |
| Marketing/Advertising (Co-op) - W&R Match10 | $1,500 | | $1,500 | | $1,500 | | $1,500 | |
| Division Office Value11 | $12,000 | | $12,000 | | $12,000 | | $12,000 | |
| Total Expenses Covered by W&R | $28,820 | | $31,386 | | $32,858 | | $35,870 | |
| Total Compensation | $78,820 | 113% | $106,387 | 105% | $132,858 | 102% | $185,870 | 98% |
| Less: |
| Transaction Fees12 | $0 | | $0 | | $0 | | $0 | |
| E&O Coverage13 | $780 | | $780 | | $780 | | $780 | |
| Technology Fees14 | $1,050 | | $1,050 | | $1,050 | | $1,050 | |
| Marketing/Advertising (Co-op) - Advisor Match10 | $1,500 | | $1,500 | | $1,500 | | $1,500 | |
| Health Insurance8 | $9,090 | | $9,090 | | $9,090 | | $9,090 | |
| Total expenses not covered by W&R | $12,420 | | $12,420 | | $12,420 | | $12,420 | |
| Net Compensation | $66,400 | 95% | $93,967 | 93% | $120,438 | 92% | $173,450 | 91% |
1IVC does not include Service Fee Revenue.
2 MAP sales are eligible for a prepaid commission (three years of annual fees) at point of sale. 3 Investment Bonus is an annual calendar-year bonus based on specific requirements.
4 Entrepreneur (E-Bonus) Program is effective for 12 months and requires manager approval to participate. 5 Other Bonus Opportunities: Professional Career Bonus is paid to top 80 Classic and Choice advisors with IVC over $5,000,000. Bonuses range from 5 to 10% of eligible earnings. Advisors also receive Equity Compensation. Top 12 advisors earn President’s Council Bonus.
6 Advisor’s initial licensing fees paid for in their resident state (and one non-resident state if advisor lives within 100 miles) based on production GDC. 7 Some firms may charge an OSJ/Compliance Fee that generally ranges from 3 to 10% of GDC. This figure uses an estimated 5% of GDC and represents the approximate value of services that Waddell & Reed covers on behalf of the advisor.
8 A portion of your health insurance may be subsidized based on production GDC. Amounts shown are for enrollment in the CORE health plan for advisor plus two or more dependents.
9 Chairman’s Cabinet Platinum trip (value $8,500), Crest trip (value $8,500), Circle of Champions meeting (value with guest $3,500, value without guest, $2,500). 10 Advisor reimbursed up to 50% of covered program expenses. Example shown is $3,000 with $1,500 reimbursed by Waddell & Reed. 11 For advisors in division or district office, space expense is $12,000 value and covered by Waddell & Reed. Advisors in an independent office may qualify for office support up to $24,000 per year. 12 Transaction Fees: Fee is covered by home office unless transaction is done through NetX360™. 13 E&O Insurance Premiums: $65 per month, first year advisors; $100 per month, second year + advisors. 14 Technology Fee: $175 per month (beginning six months after activation date).