Wealth advisors salary: Wealth Advisor Salary | Salary.com

Wealth Management Advisor Salary (January 2023)

Updated December 12, 2022

$91,605yearly

To create our salary estimates, Zippia starts with data published in publicly available sources such as the U.S. Bureau of Labor Statistics (BLS), Foreign Labor Certification Data Center (FLC) Show More

$44.04 hourly

Entry level Salary

$49,000

yearly

$49,000

10 %

$91,605

Median

$168,000

90 %

How much does a Wealth Management Advisor make?

Wealth management advisors make $91,605 per year on average, or $44.04 per hour, in the United States. Wealth management advisors on the lower end of that spectrum, the bottom 10% to be exact, make roughly $49,000 a year, while the top 10% makes $168,000.

Location impacts how much a wealth management advisor can expect to make. Wealth management advisors make the most in Massachusetts, New York, Rhode Island, Maine, and New Jersey.

Highest Paying State

Massachusetts

Highest Paying City

New York, NY

Highest Paying Company

Capital Group

What Am I Worth?

Highest Paying State

Massachusetts

Highest Paying City

New York, NY

Highest Paying Company

Capital Group

What Am I Worth?

Highest Paying States For Wealth Management Advisors

The darker areas on the map show where wealth management advisors earn the highest salaries across all 50 states.

• State View
• County View

Average Salary:

Wealth Management Advisor average salary by State

Rank	State	Avg. Salary	Hourly Rate	Job Count
1	New York	$123,242	$59.25	2,872
2	Rhode Island	$111,392	$53.55	230
3	Connecticut	$103,069	$49. 55	793
4	Virginia	$101,253	$48.68	2,089
5	Massachusetts	$123,591	$59.42	1,402
6	Delaware	$95,934	$46.12	287
7	New Jersey	$110,003	$52.89	1,295
8	North Dakota	$92,824	$44.63	205
9	District of Columbia	$102,106	$49.09	377
10	Maine	$111,147	$53.44	179
11	Illinois	$92,336	$44.39	2,393
12	California	$96,443	$46.37	5,992
13	Washington	$93,225	$44.82	1,307
14	Oregon	$92,351	$44.40	726
15	Pennsylvania	$92,103	$44.28	1,715
16	West Virginia	$98,565	$47. 39	194
17	Michigan	$89,754	$43.15	1,203
18	Ohio	$88,348	$42.48	1,442
19	New Hampshire	$90,440	$43.48	237
20	Vermont	$88,280	$42.44	116
21	North Carolina	$81,816	$39.33	1,467
22	Georgia	$82,323	$39.58	1,492
23	Texas	$77,094	$37.06	3,854
24	New Mexico	$81,981	$39.41	277
25	Louisiana	$81,692	$39.27	444
26	Florida	$75,845	$36.46	3,027
27	Kansas	$70,820	$34.05	979
28	Wisconsin	$73,189	$35.19	1,138
29	Minnesota	$77,226	$37. 13	1,122
30	Idaho	$84,228	$40.49	104
31	Alabama	$74,389	$35.76	702
32	Arizona	$73,162	$35.17	1,180
33	Maryland	$77,606	$37.31	1,018
34	Kentucky	$75,967	$36.52	481
35	Indiana	$74,583	$35.86	894
36	South Carolina	$76,847	$36.95	530
37	Nevada	$71,701	$34.47	327
38	Arkansas	$57,730	$27.75	1,404
39	Colorado	$68,298	$32.84	1,111
40	Wyoming	$57,040	$27.42	183
41	Montana	$55,594	$26.73	493
42	Hawaii	$64,189	$30. 86	183
43	Oklahoma	$53,171	$25.56	1,164
44	Alaska	$64,079	$30.81	139
45	Utah	$52,768	$25.37	900
46	Missouri	$59,727	$28.71	949
47	Tennessee	$60,699	$29.18	846
48	Nebraska	$65,448	$31.47	301
49	Iowa	$66,698	$32.07	464
50	South Dakota	$58,254	$28.01	145
51	Mississippi	$55,709	$26.78	289

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Highest Paying Cities For Wealth Management Advisors

Rank	City	Avg. Salary	Hourly Rate
1	New York, NY	$125,940	$60.55
2	Boston, MA	$125,636	$60.40
3	Portland, ME	$113,217	$54.43
4	Greenwich, CT	$103,439	$49.73
5	Washington, DC	$102,850	$49.45
6	San Francisco, CA	$102,502	$49.28
7	Richmond, VA	$101,541	$48.82
8	Seattle, WA	$94,676	$45.52
9	Chicago, IL	$93,834	$45.11
10	Philadelphia, PA	$92,941	$44.68
11	Portland, OR	$92,418	$44.43
12	Cleveland, OH	$90,966	$43.73
13	Atlanta, GA	$81,860	$39.36
14	San Antonio, TX	$79,826	$38. 38
15	Charlotte, NC	$79,779	$38.36

Wealth Management Advisors Salary Details

Average Wealth Management Advisor Salary Graph, Trends, and Summary

What is a Wealth Management Advisor’s Salary?

Highest Paying Types of Wealth Management Advisors

Job Title	Annual Salary	Monthly Salary	Hourly Rate	Job Openings
Finance Professional	$55,551	$4,629	$26. 71	124,570
Corporate Finance Analyst	$76,023	$6,335	$36.55	114,375
Finance Planner	$71,607	$5,967	$34.43	91,557
Finance Consultant	$77,551	$6,463	$37.28	94,259
Finance Counselor	$40,561	$3,380	$19.50	101,005
Investment Consultant	$109,300	$9,108	$52.55	48,111

How Would You Rate The Starting Salaries For Wealth Management Advisors, As Well As The Prospects For Salary Advancement?

While starting salaries in financial services can vary quite significantly, based on a wide variety of factors, we know that: firms looking for a CFA charterholder are willing to pay an 8% premium, and CFA charterholders earn more than their peers by about 60%, according to our research.Show more

Here are the five companies hiring the most now:

1. CVS Health Jobs (18)
2. Citi Jobs (15)
3. Ernst & Young Jobs (11)
4. Salesforce Jobs (9)
5. Morgan Stanley Jobs (67)

Which Companies Pay Wealth Management Advisors The Most?

According to our most recent salary estimates, Capital Group and Univest Financial Corporation are the highest paying companies for wealth management advisors.

Wealth Management Advisor Pay Trends

The salary for a wealth management advisor can vary depending on the years of experience that a person has, from entry level to senior level. An accountant with 0-2 years of experience earns an average salary of $49,808, a mid-career professional with 3-6 years of experience makes $91,605 a year on average, and a senior level accountant with 7-12 years of experience enjoys an average annual salary of $137,765. Data on how experience level affects total compensation is provided by the Bureau of Labor Statistics (BLS) as part of their National Compensation Survey, which is based on factors such as knowledge, complexity, contacts, and environment.

Entry Level

Senior Level

Average Wealth Management Advisor Salary Over Time

Compare salaries for individual cities or states with the national average.

Recently Added Wealth Management Advisor Salaries

Wealth Management Advisor Salaries FAQs

What State Pays Wealth Management Advisors The Most?

Massachusetts pays Wealth Management Advisors the most in the United States, with an average salary of $123,591 per year, or $59. 42 per hour.

How Do I Know If I’m Being Paid Fairly As A Wealth Management Advisor?

You know if you are being paid fairly as a Wealth Management Advisor if your pay is close to the average pay for the state you live in. For example, if you live in New York you should be paid close to $123,242 per year.

What Type Of Wealth Management Advisor Gets Paid The Most?

Investment Counselor gets paid the most. Investment Counselor made a median salary of $120,817. The best-paid 10 percent make $163,000, while the lowest-paid 10 percent make $89,000.

Does Wealth Management Pay Well?

Yes, wealth management pays well. Those starting in wealth management may see their median salary sitting at $82,300 per year in the United States. Those just starting can be expected to receive approximately $52,500 just starting, while those in the upper 10% may see salaries of $111,200 per year.

How Much Can A Wealth Management Advisor Make?

A wealth management advisor can make upwards of $111,200 per year. Some salaries may see elevations of $300,000 or more per year with proven experience.

Experience, industry, and company play major roles in the salary earned by a wealth management advisor. Those working in companies like Merrill Lynch may make substantially more than those working for a smaller company or a company just starting up.

How Much Does A Wealth Management Advisor At Merrill Lynch Make?

A wealth management advisor at Merill Lynch makes between $88,000 and $97,000 on average. Salaries are often based on a proven track record, portfolio, and experience. Since Merrill Lynch is one of the premier wealth management companies within the United States, its requirements and compensation may exceed industry standards.

Have more questions? See all answers to common business and financial questions.

Search For Wealth Management Advisor Jobs

Updated December 12, 2022

How much Financial Advisors make (Financial Advisor Salary REVEALED!)

Financial advisors are not credit intermediaries

Its dubious to me that this financial advisor salary data is accurate because these are not the terms that financial advisors use to define themselves. And it’s unclear what this term “credit intermediation” even refers to. Most financial advisors want nothing to do with helping people get out of credit card debt. Is that what they mean? Or are they talking about lending, about providing a line of credit almost as an investment banker does.

Can we really be sure the BLS is tracking financial advisor salaries, as we define them (the person who helps you with your IRA rollover) with these numbers? It does not seem like it.

“Securities, commodity contracts, and other financial investments and related activities.” This sounds more like a portfolio manager, investment manager, hedge fund manager, or trader. This does not sound like the typical job description for a financial advisor, the person who helps people retire and send their kids to college.

“Management of companies and enterprises.” Is that like a CFO?

But nonetheless:

10% of financial advisors earn less than $42k? WTF!

The BLS states

The median annual wage for personal financial advisors was $87,850 in May 2019…The lowest 10 percent earned less than $42,950, and the highest 10 percent earned more than $208,000.

Source: Ibid

Whoa, whoa, whoa. How can this be accurate?

First of all, if it’s less than $42k, they are probably a junior advisor of some sort. It is good that the BLS is using median instead of mean, because that may have helped decrease some of the skew to the left tail. At least they got that part right.

Junior financial advisor pay is probably skewing this measurement

But let us be real for moment. When we ask how much wealth managers make, we are not really interested in how much junior (associate) advisors earn.

• That is because junior advisors may or may not be licensed, and even if they are, they are not really fully in relationship development mode.
• They are not out there at the Chamber of Commerce meeting reeling in new people to sell whole life insurance to. This really caps the upside of their compensation.
  • Once a junior financial advisor does start to accumulate clients they probably become promoted to be senior financial advisors, and that is the point where they start earning the higher salaries. And good for them, because making $40k a year here in the US is a tough way to live!
• Low salaries are unfortunately the reality at many of the smaller financial advisor practices, though, and I have outlined some solutions for how to escape what I call the small RIA firm poverty trap.

Whether the salary is low due to newness to the industry or other factors such as firm size isn’t my point, though. I was trying to convey that I feel that in their analysis the BLS really should have separated out junior financial advisor pay from this reading.

Only 10% of financial advisors earn more than $208k? Say WHAT?

I also have doubts about the accuracy of the statement that “The highest 10 percent earned more than $208,000.” The BLS says that they did not include bonuses when they surveyed financial advisors who work at firms as opposed to being self-employed. That definitely will take down the measurement a notch.

But wait a minute – they were able to find financial advisors who work on salary? How’d they do that? I’m dying of curiosity.

Most aren’t on salary in the first place

Please tell me, all of you who are familiar with this industry, who the heck offers their financial advisors a salary? I have heard of Buckingham Strategic Wealth and Edward Jones paying a salary, and that is it.

A financial advisor is a salesperson and we all know that salespeople get preeeeeety lazy and complacent when you give them a salary. It would be interesting to see how many of the financial advisors surveyed about their compensation were paid on salary as opposed to getting paid the “old fashioned way” – eat what you kill (like most of the industry does!)

I have found it is not uncommon for a financial advisor to earn more than $250k. And by the way, I doubt this line about only 10% of advisors making more than $200k is true. Because if it were true then there would not be many people wanting to actually be financial advisors. There are hundreds of thousands of financial advisors in the US. If this data were true, there would be maybe 20.

Many financial advisors are planning to retire on their book of business. Which prompts me to ask – what is your book of business worth? If your salary is less important to you than the equity in the business and its sale price, consider finding out how to value your financial advisor practice and/or contact a consultant to do so…preferably before it’s time to sell it and retire.

By the way if you are enjoying my fun and irreverent style in this blog, then please feel free to sign up for my weekly newsletter.

What is a good Financial Advisor Salary?

According to the BLS, the median annual wage for personal financial advisors was $87,850 in May 2019.

So here’s a better question. What is a good financial advisor salary?

If the median wage of Financial Advisors were less than $90k a year then that it is breadcrumbs in relation to the amount of liability you are taking and how hard you do have to work and keep up with your certifications. So, like I had mentioned, I’m going to take a minute and voice my opinion. This is based upon what I have seen in the industry over my ten plus years of experience.

I’ll talk about from two angles, what financial advisors with experience and an established book tend to earn. The other being what financial advisors earn when they are starting out.

• What is a good financial advisor salary? Given the amount of risk and liability you are taking by assuming this role, you should earn at least $150 per year after you pass the entry level.
• What do starting financial advisors earn? I have seen them earn between $30k to $80k starting salary. It depends upon how aggressive the firm wants them to develop new business.

Is Financial Advising A Good Career?

All of this begs the question, is financial advising a good career? Is it worth it being a financial advisor given the risk you take?

Some of these clients are such pains in the neck. In a bad market, imagine the stress of every single client calling you ready to fire you, and you have to talk them down from the ledge figuratively of course. And then in an easy market they want to hassle you on performance and say how they could have done it better in an index and following Cramer or CNBC, and what are you getting your fees for. Then they want you to act like their personal butler to make it up to them or something. It’s not an easy job.

Or even better, how even can financial advisors maximize the amount of money they make? How financial advisors earn more money?

Both of these topics I am going to address next. But first, I have a question for you. Are you enjoying this blog so far? If so, I encourage you to follow my podcast as well. In the podcast I focus on financial advisor lead generation and marketing, and I do it in a highly entertaining way just like how I’m entertaining you with this blog. Please subscribe here.

Take control of your profitability, financial advisors!

For example there was this one podcast I did about how most of you are breadcrumbing away your own financial advisor profitability. Please listen to it! In this podcast you can learn about:

• Why the typical ways that financial advisors assess their success are lacking, and what the best metrics are to evaluate the success of your business
• Running your business like a profit center not a sales office
• Working with fewer clients may be the best thing for your business. Consider how your service offering is impacting your profitability and potentially allowing you to become breadcrumbed – and what to do about it.

Remember that it’s not as much about how much revenue you make top line as it is about how much you take home. So let’s take a look at what financial advisors are making versus how profitable their practices are.

Earnings highly related to profitability

It is not selfish to be concerned about how much you are taking home and how profitable the practice is. I had a vendor to my own firm that he went out of business. He was someone I relied upon a lot and it looks like he could not sustain his business, and he went out of business, this was really harmful to me and my firm. It caused a little bit of confusion. Luckily I was able to take advantage of other resources but it was really not a good feeling.

You have people that are depending on you and the more profitable your firm is, the greater stability there will be and you can compensate your people, and the more value I think you can give that back to your clients. So, you are not being selfish in wanting to maximize your profitability, and having said that, it doesn’t mean you have to go about this in a self-serving way.

The question then becomes; how do I maximize my compensation as a financial advisor? But how do I do this in a way that keeps the client’s best interests in mind? And that is what I have sketched out and is what I am
going to look at.

Right here I am going to show you.

First let’s start by looking at the traditional model.

The traditional financial advisor profitability model stinks

Let’s say that a Financial Advisor is traditionally going to be having between 100-150 clients, let’s say you have 120, on an annual basis you are putting up about 1400 hours of work and on a weekly basis this comes out to around 29 hours a week. That’s a whole heck of a lot of hours, doesn’t mean too much time for that much else considering that you have the operational aspect of the firms, the administrative aspect and training to manage employees. All of this at a firm of this size it probably wouldn’t just be you, you would need some other support resources.

So this comes out to be a per hour rate of $125, not great on a per hour basis, annual revenue coming in at $180,000 and then the profit margin let’s say at 70%. Now this is assuming that you are an independent and you are not working at a big brokerage house and not a W2 employee because if so they are going to take a big pay-out.

Let’s say you are an independent, you have your own firm and you are getting 70% of your revenues taken home as your top line revenue. So this comes to pre-tax take-home of $126,000 assuming a 70% profit rate. After taxes, this is not that far off the BLS data.

It’s funny right? So funny I forgot to laugh.

The fact is that making this amount of money as a financial advisor stinks relative to all the stress you have to go through. Most financial advisors I know are running around like their hair is on fire. Wouldn’t you rather make more money without having to be like this?

I’ll tell you how. You’ve got to be able to create more profitable relationships. In the next section I’ll discuss how to plan this out.

A better paradigm for profitability: The 70 Deep Model

Let’s re-examine the financial advisor profitability chart.

At 120 clients in your practice is that really a comfortable practice? I mean you are making a living; your clients are getting a service, but wouldn’t you rather do what I am calling the ’70 deep’ model which would advocate for fewer clients but having much deeper relationships with them.

So, if you have 70 clients, let’s say they are larger clients, let’s say these are ultra-high net worth clients of maybe $2,000,000 to $5,000,000 portfolio size, you are spending 840 hours a year instead of 1400  because you are assuming 1 hour per month on each client. On a weekly basis you are spending much fewer hours than in the traditional model, your revenues are coming in higher because you are making more because you are having more time to spend on each client. This allows you to really delve in deep into some of the deeper, more sophisticated planning aspects. And like I said these are larger clients, so not only do they probably have larger asset base, but there is also more to do for each clients, and it all comes out that much better in terms of profit margin.

Let’s say that maybe you are taking home a little bit more. Again, this is not totally awesome but I would assume that as a financial advisor you would be wanting to make more than that. But it does allow financial advisors to make higher compensation because with 70 clients you can burrow down deeper.

When you get these 70 clients, you are providing more sophisticated services, you have the freedom
of time where you can then go up in asset size and get clients with even deeper needs.

Let’s say you created a strategy where you do this in a very deep, thorough and deliberate (careful) way, where you were very selective about who you worked with and you weren’t running around trying to scramble for the next client because you are deeply entrenched with these 70 clients here. They feel serviced you feel served. Less client turnover better for your practice, less for you to mentally be preoccupied with and then you can focus on getting even bigger clients. Your referrals will probably increase as well because with these 70 clients you have these deeper relationships and hopefully they could maybe pass on a word or two about you if you are doing a good job.

Financial advisors should increase value & profitability to increase earnings

So the point I am trying to make is here, financial advisors, is that it is overall a lot more advantageous for your compensation and the profitability of your company for you to use what I am calling the ’70 deep’ model, and for you to focus on fewer clients but really to maximize the value of what you are doing for them.

That means knowing them deeper, providing higher value and delivering more sophisticated solutions
that really make a difference in their lives.

It’s not to say that with more clients you would necessarily not be able to do that, but we all
have the same amount of hours in a week and if you do the math on it like I showed you in the spreadsheet, there quite simply isn’t enough mental time to focus when you have more clients that you need to take care of.

So in short what I am saying is to serve clients better, use the ’70 deep’ model and that will help you to maximize your compensation, the value of what you are doing for your clients and the overall profitability of your firm which will reward everybody in the long run.

Ways for financial advisors to build a pipeline of high net worth clients!

Now how do financial advisors go about getting more clients (other than passively waiting for referrals to come in)? I’ll cover three major ways.

#1 Financial advisor LinkedIn messages can be used to get new leads

How can financial advisors reach new clients using the internet? The words you use convey your brand and this is critical for a financial advisor to get right. Are you sure your LinkedIn messaging is good enough? I wrote an e-book called, “47 Financial Advisor LinkedIn Messages and Sequences that will NOT make you look Stupid. “ If you are a financial advisor trying to meet new clients over LinkedIn or other social media sites and you need some scripts, you can download it here.

#2 Financial advisors can use other digital methods such as blogging, podcasting, etc.

In order get to the 70 Deep Model, you really need to have to break away from the typical ways that Financial Advisors communicate, and go about prospecting in a higher value way. 

I have a membership program that teaches financial advisor strategies for using LinkedIn, Facebook, and Twitter for getting new leads. I also talk about how to relate your marketing and lead generation to certain financial advisor practice management topics. 

#3 You could use a financial advisor lead generation services

I’m not going to say anything about any one service, but in other blogs I do outline my opinion of the various financial advisor lead generation services. My basic point is that these can be very hit or miss depending on which one you choose.

Sara’s upshot

What’d ya think? Was this helpful?

If yes…

Learn what to say to prospects on social media messenger apps without sounding like a washing machine salesperson. This e-book contains 47 financial advisor LinkedIn messages, sequences, and scripts, and they are all two sentences or less.

You could also consider my financial advisor social media membership which teaches financial advisors how to get new clients and leads from LinkedIn.

Thanks for reading. I hope you’ll at least join my weekly newsletter about financial advisor lead generation.

See you in the next one!

-Sara G

Sources

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Personal Financial Advisors,
Retrieved on the Internet at https://www.bls.gov/ooh/business-and-financial/personal-financial-advisors.htm (visited October 25, 2020).

Rich and “middle”… by German standards

Germany is one of the richest countries in Europe, combining technology, simplicity and practicality. According to the forecasts of sociological services, in the coming years, the stable growth of wages, the purchasing power of the population and the standard of living in general will only continue here.

What classes are the working population of Germany divided into and what level of income ranks the inhabitants of this country as “middle” and rich?

Let’s start with “big fish”. The sources note that millionaires in Germany are divided into two categories: those with millions in income and those with millions in capital. nine0005

The first category includes only 0.05% of the population, or 19,000 citizens. Their average annual income is over 2.5 million euros. They provide almost 7% of the total income tax. There are much more owners of capital with six zeros in Germany. Including property owners, there are more than two million.

Middle class

According to the federal government, a German who has at least two average incomes is considered rich. There are about 8% of such people in Germany. People with an income of 1,080-4,520 euros per month can be considered representatives of the middle class. If we talk about a family with two children, then the monthly income should be 2,280-9480 euros.

In 2019, the average wage in Germany (before all taxes) was 4,093 euros, 3% higher than in 2018 (3,981 euros).

After all the deductions, the Germans have about 2,456 euros “clean” in their hands. The total income of a citizen is made up not only of the salary, but also of various social payments that the authorities can issue on vacations and holidays.

The majority of German pensioners, despite the public discussion about the prospects for impoverishment in old age, are consistently middle class. Moreover, the elderly tend to increase in well-being. nine0005

According to a more detailed classification of the German Institute for Economic Research (Deutsches Institut für Wirtschaftsforschung, DIW), the middle class, like millionaires, can be divided into categories: “middle class in the narrow sense” and “upper middle class”. There is also a “subjectively perceived middle class”. According to multiple surveys, 60% of Germans belong to the latter category. These are residents who own real estate or are able to afford vacation several times a year. nine0005

Ideally, the amount of salary in Germany depends on the length of service, specialty and level of education, which is quite fair and does not even raise questions. Let’s not forget that the salary also depends on the region.

The richest and most economically developed region is Hessen, where one of the world’s financial centers, Frankfurt am Main, is located. This is where the headquarters of the European Central Bank is located.

The average income of a Hessen resident is about 4,600 euros per month. The lowest hard-earned money is received by residents of East Germany (the territory of the former GDR). Curiously, the incomes of Berlin residents are at the average level, while in most world capitals salaries exceed the national average. nine0005

Top professions

The list of the highest paid professions in Germany includes senior managers, employees of aviation, banks and stockbrokers, employees of insurance companies, doctors and pharmacists, business consultants, lawyers, information security specialists and programmers, specialists in the automotive industry , research centers and laboratories, energy and economists.

There are TOP 6 companies in Germany whose employees have the highest salaries in the country. Among these is the LBBW (German international universal commercial bank headquartered in Stuttgart) – the largest bank in the country, the average salary of local clerks is more than 100,000 euros per year. It is immediately followed by Siemens with the same figures. Next on the list is the Hong Kong and Shanghai Banking Corporation (HSBC), the UK’s largest bank with offices around the world. The average salary here is about 90,000 euros per year. This is followed by the largest mobile operator Vodafone – about 85,000 euros per year for one employee. Bosch and Henkel close the top six with an average of 75,000 euros per employee per year.

But workers in such areas as metallurgy, forestry, telecommunications, hospitality, education and art cannot boast of large incomes. And if the latter receive about 34,000 euros a year, the former receive 21,000.

However, one can argue with this. Thus, Kazakh German Tatyana Teske, who has lived in Germany (Hesse) for more than 12 years, considers the data of the German Institute for Economic Research to be too generalized. nine0005

– I’m willing to challenge the fact that education workers in Germany are among the lowest paid. For example, school teachers in Germany earn very well, about 3,500 euros, and sometimes all 4,000 euros per month – in all lands. It may be smaller in the East, but there is such a situation in all spheres. Educators are a loose concept. For example, university professors do get paid less than school teachers, she notes.

By the way, Tatyana is a teacher of German by profession. In Germany, she managed to work both as a “free artist” in German language courses for foreigners, and as a teacher at school. nine0005

– The people who earn the least in Germany are those who are not covered by the rules regarding the minimum wage. These are minors, trainees, pedlars of the press and other persons engaged in unskilled work, the interlocutor added.

The Teske family consider themselves middle class. Just in time for those 60% that are called “subjectively perceived middle class”.

– When I was working and not yet sitting at home with my second child, our family could afford vacations two or even three times a year. But again, it’s all relative. Someone will buy a new car or furniture with this money, but we just love to travel. With the advent of our second child, we began to go on a full vacation once a year. nine0009

Living standards

So we come to the question of what the Germans spend their hard-earned money on? According to DIW data for 2019, an impressive part of the salary of the average German resident goes to food – up to 29%. 27% is spent on rental housing, 14% on the maintenance of personal transport, the same amount is spent on visiting cafes and restaurants. 6% for sports or hobbies and only 3% for clothes.

Standards of living, quality of educational and medical services in Germany have reached a very high level, and monthly expenses here largely depend on the place of residence and lifestyle of a person. For single men or ladies renting a one-room apartment on the outskirts of a small town, 1,200 euros per month will be enough, provided that they do not lead an overly active lifestyle. nine0055 It is curious that in recent years the size of the middle class in Germany has not increased. Working people have to make efforts not to lose this status. But where is the middle class going?

– Fewer and fewer citizens manage to rise from the low-income stratum to the middle class. And often even a good education is no guarantee of a prosperous life. One in four members of the middle class experience constant anxiety caused by the fear of losing their status. The middle class is no longer replenished by an influx of people from low-income strata, and members of the middle class with good education and professional skills make their way to wealth faster, according to a study by experts from the Bertelsman Foundation and DIW. nine0009

Analyzing the trend of “compression” of the middle class, experts are talking more and more about demographic changes. Including, about the influx of immigrants into Germany and the loss of the concept of “family” in the classical sense. Newcomers rarely join the middle class, most often falling into the category of people with low incomes.

– Immigrants, mostly from Eastern Europe and now refugees, are initially at the bottom of the income distribution ladder, says Jürgen Schupp, co-author of the DIW study. – The quota of the poor strata of society is thus increasing. nine0009

The growth in the number of single people experts call another important factor in the reduction of the middle class. Researchers of this issue in Germany give the income of households consisting of one person a smaller share compared to couples, since singles have potentially higher fixed costs. Other factors influencing the shrinking middle class include an increase in the number of part-time workers, as well as a significant difference in wages for low, medium and high-skilled workers. nine0005

Despite the fact that Germany is a country where feminism triumphs, women here often earn an average of 300-500 euros less than men, which sometimes becomes the basis for serious conflicts in the workplace. And this despite the fact that in 2017 in Germany a law was issued on the equality of wages of different sexes. In accordance with it, employees of firms with more than 200 employees get the right to know the salary of colleagues of the opposite sex occupying a similar position. nine0009

Evgenia Shol

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More wealthy Norwegians move to Switzerland

Lugano in the Italian-speaking canton of Ticino – Norwegian magnate Kjell Inge Røkke moved here in September. Keystone / Martin Ruetschi

Over the past year, more than 30 of the richest Norwegians have left for Switzerland and other countries, and business community leaders are expressing concern about the wealth tax imposed by the centre-left government in Oslo. nine0005
This content was published on December 27, 2022 – 05:00

December 27, 2022 – 05:00

Publicly available documents filed with the Norwegian Population Register show that in 2022 at least 30 billionaires and millionaires changed their place of residence in a prosperous Scandinavian country to an Alpine country jurisdiction with a more forgiving tax regime. Among them was the tycoon Kjell Inge Røkke (Kjell Inge Røkke), who owns assets in various market segments – from fishing to oil production, at one time was considered the richest man in the kingdom. He settled in Switzerland. Others have moved to countries such as Cyprus, Italy and Canada. nine0005

Wealthy Norwegians and tax advisers say others are likely to follow suit, with the wealthy worried about fiscal changes that they see hurting the country’s competitiveness. The last to leave was Fredrik Haga, the 31-year-old co-founder of the $1 billion blockchain analytics company Dune. Even before Christmas, he officially registered his move from Norway to Zug, Switzerland.

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nine0004 “I had to choose: either I stay at home, or I want my company to prosper. It’s not that I don’t want to pay taxes. The problem is that now I pay taxes on money that I simply do not have on hand, ”he told the Financial Times.

Norway’s wealth tax of 1.1% for the wealthiest individuals, which is levied on all personal wealth in excess of NOK 1.7 million (CHF 160,000), has been the subject of heated debate. Switzerland also has a similar tax, but benefits are provided for foreigners. nine0005

Norway’s current tax structure may force entrepreneurs like Haga, who have most of their wealth invested in the business, to either withdraw some capital from their company through the payment of large dividends, or sell a stake in it. However, Dune is still a loss-making, but rapidly growing company, so Hagi did not have the opportunity to organize the payment of dividends, and he also does not want to sell a share of his business.

“I have to either withdraw the money from the company or move,” said Haga, who fears that the amount of tax obligations he must meet in the next reporting period will be several times greater than the amount of his net income after taxes . nine0005

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A group of wealthy Norwegians who left for Switzerland this year have a combined net worth of NOK 29 billion. According to Norway’s publicly available annual tax return, they paid NOK 550 million in taxes to the country’s budget. The newspaper Dagens Naeringsliv calculated that in 2022 the outflow of the population from this Scandinavian country was greater than in the previous 13 years combined. Røkke, who moved to Lugano in September and paid NOK 181 million in taxes last year, declined to comment. nine0005

A stumbling block

Norway is one of the few countries in Europe where, after France abandoned it in favor of a property tax in 2018, there is still a wealth tax that has long become a stumbling block for the country’s richest citizens.

“He’s distorting Norwegian business in every possible way,” said Mathilde Fasting, a tax expert at think tank Civita. “Because of it, owners are forced to demand dividends from their companies, sometimes in excess of profits, and they gradually completely lose the desire to invest in their business here.” nine0005

In addition, in Norway the wealth tax is also a demarcation line between left and right. While the latter are pushing for its abolition, the centre-left government of Prime Minister Jonas Gahr Støre this year raised the wealth tax and dividend tax rates, and revised down the deductions for business assets.

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In 2022, wealth taxes on business assets appear to have doubled in 2022 compared to the previous year, with tax on dividends up nearly 50%, according to M. Fasting. And in the near future, the so-called “exit tax” will be introduced for those who decide to give up their tax resident status in Norway and leave the country. This tax will be imposed on all unrealized profits earned in Norway up to the time of the move. Thus, the government is trying to contain the outflow of its wealthiest citizens. nine0005

As Mathilde Fasting told us, although Norway “was never considered a country with a serious level of political risk,” now the owners of companies are thinking something like this: “With this government, we have to live a couple more years, and things can only get worse.”

Generous Welfare State

The government has taken an intransigent position. Erlend Trygve Grimstad, state secretary at the finance ministry, said the government wants both individuals and companies to thrive in Norway. However, for Norway to remain a generous welfare state, its wealthiest citizens must pay more than they do now. He added that there are still several thousand millionaires in Norway, more than in many rich countries on a per capita basis. nine0005

“People get free education, national infrastructure, free health care, subsidized pre-school childcare, strict rules governing unpaid leave, and a corporate tax comparable to other countries. This means that those who have succeeded in this social model should make a more significant contribution than the rest,” he said.

Not all rich Norwegians are going to leave. Nicolai Tangen, former owner of the British hedge fund AKO Capital and current manager of the Norwegian Sovereign Fund, returned from London and was forced to pay NOK 60 million more in taxes than he received as a salary of a Norwegian civil servant. “I personally pay taxes with pleasure and I think that I get a lot from the state for this money,” he said. nine0005

Karl Johan Lier, chief executive of robotic warehouse specialist AutoStore and the nation’s ninth largest taxpayer last year, said he understands why people leave, especially those who run start-ups. “Many should not have been forced to leave the country,” he said, adding that he himself would not follow their example. “My family is here, my grandchildren. They are much more expensive for me than some kind of tax benefits,” he stressed. nine0005

Fredrik Haga admitted that he gained little from being open about his opinion, but it was an attempt to sound the alarm to Norwegian entrepreneurs and the nascent startup segment.