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Often times advisory firm owners struggle over associate, junior advisor and even partner compensation. They cannot gauge starting salaries, so they keep pushing the human capital decisions off, which is detrimental to the overall success of the firm.
Not knowing the best practices around compensation also impacts existing employees.
Here are some useful tips based on my interviews with a handful of industry experts.
Be creative with compensation
The dollars deposited into an employee’s bank account are not the only thing that attracts and motivates a member of your staff.
Vanessa Oligino, director of business performance solutions at TD Ameritrade Institutional advised owners of RIAs to “think beyond cash.” She said that a focus on total rewards is more important. Retirement, health benefits and intangible perks should be a focus.
Oligino referenced a Gallup study, the 2017 State of the American Workforce. She pointed out that it says “a significant increase in income” is the fourth item people take into account when considering a new career opportunity.
The three things before income are:
- A role that allows them to do what they do best;
- Greater work-life balance and better personal well-being; and
- Greater stability and job security.
She encouraged those hiring to think “in terms of total return.” She shared a list of non-traditional benefits, including working remotely, flex time, wellness benefits like a gym membership or even organic food vouchers, paternity and maternity leaves, training, free meals on Fridays, summer Fridays where there is a rotation of who can take off early, casual dress and volunteering.
These types of investments in associates create a desirable culture and build community in a firm. For these reasons, Oligino claimed employee compensation should have more than just the cash component.
Find where to start
Firm owners get stuck on how much to compensate advisors and associates. Phillip Flakes, co-founder and CEO of Succession Link, pushes advisors to do their research.
There might be a significant range, and that might vary by region. Flakes points out that when hiring advisors, it is important to determine things like whether this person will be a partner or a W-2 associate.
When looking for a salary range, Flakes recommends starting with glassdoor.com and payscale.com. That is even more complicated when bringing on partners, as the total partner compensation can be comprised of salary, bonus and profit sharing.
After that, Flakes says owners should get more refined with their new-hire offering by networking with other advisors and asking lots of questions. It is no surprise that he believes his own Succession Link is a great place to network. (If interested, use discount code BYRNS25OFF to get 25% off.)
Read the full article here by Mike Byrnes, Advisor Perspectives