I started my career in management consulting with one of what was then the Big Five accounting firms. In that world, there was a very defined career path from consultant to manager to partner. It would take roughly 10 to 12 years to work my way up that ladder. I knew what was expected and how to earn promotions. It was crystal clear. It was also a very large company (80,000 worldwide employees kind of large). I value the experiences I had and relationships I developed, but the career path wasn’t exactly personalized, and I would never have had much input in decisions that impacted the direction of the firm.
The financial planning profession is different. We are still defining career tracks and paths to partnership. Small businesses are very personal, and each and every team member has an impact on the culture and the success of the business. It may be messy at times — and there can definitely be a lack of clarity from one step to the next — but to me, that is exciting. For me, the ability to help define my own career path and to have a noticeable role in the direction of the firm made my desire to progress toward ownership even stronger because I have a clear and vested interest in the business.
My path to ownership probably started on the day of my interview with the firm. In a previous column, I talked about young financial planners not being afraid to ask questions in interviews. For me, an important question was whether there would be an opportunity for equity ownership in the firm someday. I was not asking for it immediately — I expected to earn it — but I knew that ownership would be important to me, even if I probably did not truly understand what I was asking in those early conversations.
Eight years and many conversations later, I did purchase ownership in my firm in 2014. I do not doubt that I’m still figuring it out, but I have learned a few things about ownership since that interview.
Of course, ownership of a company is an investment. I think as employees, we sometimes forget, or take for granted, that the owners of a firm ultimately bear the financial risk of the company. In 2008, the owners of my firm took a pay cut; I did not. They bore the financial risk of the markets. Equity was not given to me; my purchase of shares required third-party financing. I now have a note to pay back, I share in the financial risk of ownership, and I feel the responsibility that comes along with prudently managing a company that people are depending on for their paychecks. When considering ownership, these are important things to think about.