Banks and credit unions are paying advisors more for fee-based business, according to a new report from Kehrer Saltzman & Associates.

Nearly two-thirds of the institutions surveyed are giving advisors additional incentives for fee-based business, either by putting it on a separate, more lucrative payout grid or giving advisors a bonus for the business.

"Just a few years ago, when looking at incentive plans, it was mainly about the grid payout," Peter Bielan, a principal of Kehrer Saltzman and project director for the study, said in a telephone interview. "Now we're seeing plans where it's more than just the grid amount."

For the banks and credit unions offering higher grids for fee business, payouts can range from 40% to 50%, regardless of the production level. Regular grids on all other business range from 26% to 41% and are linked to production levels, Bielan said.

"Especially for the lower producers, it's a significantly higher payout than they'd [otherwise] get," Bielan said.

Other institutions are adding a certain percentage to the existing grid for fee-based sales, with premiums ranging from 2% to 8%.

"If you go from 32 [percent] to 40 [percent], you start to see that," Bielan said. Even at the lower end of that premium scale, the boost to compensation "starts to matter," he said, particularly on higher levels of production.

The study, "2013 Financial Advisor Compensation Study," is based on 63 incentive plans from 48 institutions.

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