From the 2017 Career Guide issue of Investment Advisor • Subscribe!

2017 Career Guide: How Do Your HR Benefits Stack Up?

Motivated young planners expect more than just salaries and bonuses for their work

The benefits you offer younger planners may be more attractive than salaries and bonuses. The benefits you offer younger planners may be more attractive than salaries and bonuses.

As the season of year-end employee reviews has wound down, growing firms are now turning their attention to hiring for 2017, from filling new full-time positions to getting a head-start on interviewing for summer interns.

While new planners seeking to enter the industry are primarily interested in the work they will be doing to shape and secure clients’ financial futures, firms should be careful not to skimp on the financial and tangible benefits, as well. Beyond just offering a competitive salary, here are some ideas to incorporate into your hiring plans to further reinforce that you are making a solid offer.

Profit Sharing. Many advisory firms offer some type of incentive compensation in addition to base salary, most commonly a percentage of profits. While this is better than nothing, I suggest considering a revenue-based bonus. This motivates team members to think and act like owners even if they are not because they know they will share in the growth of top-line revenue. For small- to mid-sized firms, 1% of revenue is typical. Some rapidly growing firms will implement revenue-based bonuses with a starting floor, where the percentage only applies to revenue above and beyond what had been created prior to your new hire's tenure.

Conference and Training Budget. These have become standard for firms looking to hire the best people, who are generally geared toward constant learning and challenging themselves mentally and technically. The conference and training budget can range anywhere from $500-$5,000 annually to cover conference attendance, CE certification, association and professional licensure dues, etc. Some firms will go beyond this, though, on a case-by-case basis. If you say your firm is committed to lifelong learning, be certain to live up to the promise by offering employees these types of opportunities.

Tuition Reimbursement. Reimbursing younger advisors for CFP certification programs and exam fees has become commonplace as well among firms that emphasize lifelong learning and desire their employees to gain education and credentials in order to move up the career ladder and serve clients at a higher level. This can mean offering as little as $595 to cover the CFP certification examination fee or as much as $50,000 or more for advanced education like an MBA, MTAX, or MSFS (typically paid out over a number of years as classes are completed). To reduce the risk of not receiving a reasonable return on this education investment, it is common for firms to also require a certain number of years of tenure from the employee after their education is completed, or they must pay the firm back any monies accepted for this educational benefit. Notably, firms will often implement these policies by requiring employees to pay some, most, or all of the educational costs up front, and then reimbursing the employee after completion; in fact, some industry statistics suggest the CFP exam pass rate is higher when the employee first pays out of pocket and then is reimbursed upon successful completion.

Staff Retreats. Firms that place additional emphasis on strategic planning, employee career planning and volunteerism frequently employ this benefit. It usually consists of a firm-wide meeting off site for a few hours to a few days. This is a chance to further reiterate that employees are being heard and have input in strategic planning, are informed on company performance and financial strengths, and have an opportunity to establish personal career goals and expectations. This is also an opportunity to rest and recharge, which everyone needs from time to time to operate at the high level clients demand. Some firms will hold these periodically and spend the day as a firm building homes for Habitat for Humanity, serving meals to the homeless, delivering groceries or offering pro bono financial planning services, etc., in their community. It is widely noted that this is an important cultural characteristic desired by the younger generations in the workforce, especially Gen Y.

Financial Planning. Offering financial planning services for employees is not as common as it probably should be. Some firms offer this, though, and I have seen anything from hiring firms saying, "We will let you open an account under our master and give you an asset allocation" to new hires actually going through the firm's financial planning process just as a new client would. This can be a tremendous benefit, especially if the new hire is married, as this increases spousal buy-in, which can create strong loyalty that will be needed if times get tough later.

For firms that want to offer this but realize it might be uncomfortable for a new hire to share financial information with the new boss, there is an option to refer them to another firm that you trust. I have only seen this a few times, and typically the other firm has some type of strategic partnership with the referring firm or is the succession or continuity plan option for the hiring firm. I realize this may seem a bit odd; however, if you want your new hire to work with clients soon after starting, there is no better way for them to understand what the clients go through working with your firm in a financial planning engagement than having them experience it first-hand. This exercise alone accelerates a new hire's EQ (Emotional Intelligence) and better prepares them for client interactions versus only observing from the planner's side of the table.
Whether you are hiring new staff or need to revisit some of these items for your existing staff, consider the above to help ensure you have a competitive benefit offering in conjunction with your compelling career opportunity.

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