As we approach year end team member reviews and budget planning for 2021, now is a great time to  review your employee benefit offering, to ensure that you are staying competitive with a constantly evolving talent market.  You might find that coming off a tumultuous year, your benefit offering needs some tweaking. 

In this month’s article, we have laid out some common employee benefits we see in the advisory firm marketplace for your comparison, along with some other ideas for you to consider.  

Included below is a chart of a typical core employee benefits offering. But realize there are some organizations that provide anything from pet insurance to meditation apps, so use this as a guide to design the benefit offering your team desires the most.

 

 

Retirement - We still encounter firms from time to time that don’t have any company plan, but the most common structure for those not employing the 401k is a SIMPLE IRA plan.  Keep in mind that some of the larger firms such as Vanguard, contribute upwards of 10% into their employees 401k plans, so independent advisory firms should look to be as aggressive as financially feasible when it comes to company contributions. 

Health Insurance - This is all over the board, with some advisory firms just letting employees buy their own coverage via a state health insurance exchange, but many firms employ a group health insurance plan. If the majority of your workforce is younger and healthy, your better option is probably to get a(n underwritten) group plan. If the majority of your workforce is older, and there are known health issues, you probably want to go with a community based group plan (if available in your state). Although still in the minority, some advisory firms are funding HRAs and HSAs for their team members. 

Vacation/PTO - Still most prevalent set up is standard 2 weeks vacation when starting out, then growing from there based on tenure.  We are finding that firms are tired of the nuisance of keeping track of PTO/vacation time/unpaid time off, if they aren’t using some type of PEO (professional employer organization) to help them manage their benefits, so instead are moving towards unlimited paid time off. Which is not being abused, at least with the firms we work with, by the employed team members. 

Technology - It is worth noting that, even if firms offer it, some new hires are hesitant to accept reimbursement of cell phone and/or internet costs due to concerns about blurring the lines between professional and personal. 

Financial Planning - While growing in popularity, this is still rare probably because most of the profession, with the exception of a few, doesn’t think a financial planner should hire their own financial planner.  We can see both sides. However, this is a powerful benefit to provide to people that are newer to the profession. It gives a newly minted CFP a first hand experience of what the client feels when the client comes to meet with the newly minted CFP. It has proven to be very powerful as a career choice solidification and retention benefit and hopefully more firms will adopt it going forward. 

Conference & Training - In a post pandemic world, the future and structure of in-person conferences is not clear. With that being said, it benefits you when your professionals are talking with others via formal or informal channels about what is working and not working in their business, so you should always have a budget line item for this. And to the extent the advisory firm employees CFP professionals (and other designations), it’s still a requirement to fulfill their CE obligation somewhere.

Education Reimbursement - Similar to the conference and training component, when your professionals acquire additional education and certifications, it benefits your firm. Team members really appreciate this benefit, because it reinforces to them that you are vested in their growth, ongoing learning, and career success.  Most firms utilize a Sec 127 (tax-preferenced Education Assistance) plan for anything under $5,250/yr., and for amounts exceeding that, check to ensure that it is working condition fringe benefit to ensure you will be able to deduct the costs. 

Remember, too, if you aren't sure what to offer or what your team desires the most. You can always ask for their input. Whether you have an established firm or are just starting up, we hope these guidelines were helpful. 

Hope you had a great summer!

Caleb & The New Planner Recruiting Team

P.s. Click here to visit our website to download our newest whitepaper “On-boarding and Training New Hires Virtually”