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.