Owners of financial advisory practices are more apt to raise salaries in 2009 than to cut them, according to a new study published by FA Insight.

Yet the vast majority of the employees at these firms will see their non-bonus compensation stay about the same, according to Eliza De Pardo and Dan Inveen, the two authors of 2009 FA Insight Study of Financial Advisory Firms: People and Pay.

These findings and several more like them point to a giant difference in the employment dynamic between today and just two years ago, say the two principals of Tacoma, Wash.-based consultancy that spun off from Moss Adams last year. Their study is sponsored by TD Ameritrade Institutional.

“It’s almost laughable now that the employer was worried about the scarcity of labor and the scarcity of talent” as recently as 2007, says Dan Inveen, director of research for FA Insight.

With talented financial advisors in a relative state of abundance, financial advisors need to think far less about compensation statistics and far more about non-comp factors, he adds.

“Now it’s how you hang on to the talent you have and how you get the greatest efficiency out of the talent that you have,” Inveen says..

With those overarching thoughts in mind, here are some of the key findings of the study based on survey findings of 200 financial advisory practices conducted between May 1 and June 29.

1.) The typical participating firm expects to maintain the same level of five staff members in 2009 as it had in 2008. This leveling off represents a significant slowdown from 2007 when strong asset, client and revnue growth cause median staff levels at these firms to soar from four to five.

2.) Firm owners expect to increase their staffs by 3.5% in 2009 and just 8% of firms plan to let staff go in 2009 in response to weak financial performace.

3.) This bias toward adding to staff comes despite firms reporting an average of 45% in overhead expenses as a share of revenue. This amount is 10 percentage points higher than advisory forms experience in a stable economy.

4.) Firms that FA Insights identifies as “standouts” for their strong revenues and growth are by farthe ones most likely to be taking advantage of today’s talent glut to augment their staffs.

5.) Larger firms have more overhead, 46% of revenues, than small firms, 34% of revenues. The reason for this is that larger firms on average offer 11 different services compared to just eight services for smaller firms. In addition, larger firms tend to rely more on in-house staff to produce and support services whereas small firm outsource services more often. This makes it easier for small firms to manage overhead. One reason why big firms supply more services is that their average client has $1.4 million of assets under management, which is five times higher than at small firms. Big clients demand a higher touch and more customized service experience.

6.) Despite being stuck with some higher overheaed, large firms may be more adaptable to economic contractions than they at first appear. Because compensation is tied to performance, it adjusts to the weaker performance of the firm. “Often overlooked, however, is the ability of incentive pay to smooth out earnings through business cycles,” the study reads. In fact, owners at 22% of all participating firms receive no income other than incentive-based compensation or firm profits.

7.) Three out of every four dollars paid out by an advisory firm goes to personnel.

8.) Principals at big, successful firms remember their frustration of not being able to hire the kinds of workers they wanted two years ago. “These firms are hiring professionals as well as technical specialists before supply of these formerly hard-to-fill positions tightens once again,” the study reads. The result of this thinking is that the number of professionals employed by advisory firms is expected to increase 7.3% in 2009. Technical specialist positions will grow 4.5%.

9.) Advisory firms are seeking to hire employees from three sources: “elsewhere in the financial services industry”, 38%, recent college graduates, 34%, and RIA firms, 32%. Further down the list is national full service brokers, 25%, and independnet broker-dealers, 11%. “Despite the media attention devoted to defecting wirehouse brokers, more firms are interested in recent college graduates, and other RIA firms as sources of hires,” the study says.

10.) There are several factors just as important to retaining employees as how much they get paid: a.) providing work-life balance b.) providing interesting challenges c.) making sure that staff members understand corporate strategy d.) creating career opportunities and making it clear where lies the path to those opportunities so that employees will know where they’ll be three years down the road e.) creating collaborative work environment such that junior employees get the chance to learn from senior employees