On her visit to Financial Planning’s offices in February, Jane King’s eyes lit up when I asked how her firm, Fairfield Financial Advisors in Wellesley, Massachusetts, compensates its five advisors beyond their salary and annual bonus.
“We don’t have a vacation policy,” she told me. “It’s unlimited.” When I looked surprised, she explained that her team has worked together for many years. During that time, camaraderie and trust has grown between the advisors, which allows them to feel comfortable taking the time they need for holidays or emergencies.
Months, or even years later, they repay the trust by filling in for colleagues who had helped them when they needed the favor.
“No one takes advantage,” King said. “We are respectful of work-life balance.”
BEHIND THE CURVE WITH COMPENSATION
Aside from firms such as King’s, RIAs have mostly been behind the curve when it comes to creative, non-salary ways of remunerating their advisors, says Senior Editor Charles Paikert, who wrote our feature on compensation, “New Balance.”
They’d better get with the program, he tells me.
“There is a war for talent,” Paikert says. “RIAs have to be on the cutting edge of compensation trends to compete for top advisors and to attract talented young people to the profession.”
More firms, Paikert predicts, will emphasize “community involvement, with days given for voluntary time off and more flexible work schedules.” That’s not all. Firms that focus on career development have the best shot of keeping their most capable employees, he says, adding that he was surprised at how much time and effort RIAs are now putting into establishing career paths and incentive goals for their employees.
The shift could barely come at a better time, contributing writer Donald Jay Korn tells me.
“Markets are notoriously unpredictable, but equity markets are certainly buoyant now and we’ve seen two crashes in this century,” says Korn, who wrote “Going Beyond AUM for Pay.”
“Even a modest correction could reduce AUM-based revenue significantly, so another form of compensation might turn out to be a useful cushion,” Korn says. Meanwhile, who wouldn’t mind an extra vacation day, or three? —Chelsea Emery
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