A question we are frequently asked by the candidates that we work with is whether they should negotiate and if so how.

Negotiating salary can be tricky because most financial planning firms want you to feel like you are compensated fairly, so you can be focused on serving clients and represent the firm well. Firm owners at times are very sensitive and can take negotiating to mean you are not grateful for the opportunity and the level of compensation they have initially laid out.  Making the decision to negotiate compensation should be based on your personal need and finding a fair compensation figure for your experience and credentials.

Focus on overall compensation

 

We encourage our candidates to focus on their total compensation package even though the natural tendency is to be overly focused on just the salary figure. Your total compensation is made up of many more elements than the cash component. Here are some of the main areas:

• Base Salary – your base salary is your fixed annual pay excluding other benefits, commissions, or bonuses.
• Incentive Compensation – additional cash compensation you can earn above and beyond your base salary. Some bonuses will be based on personal performance, firm metrics, or a combination of both.
• Retirement Plan Match – any matching, non-discretionary, or profit-sharing contributions on your retirement plan.
• Insurance Contribution – factor in the firm’s contributions towards any group health, disability, or life insurance benefits.
• Continuing Education Budget – As an early-career financial planner, continuing education and industry networking outside of your firm is important. Whether you decide to attend a conference or pursue professional designations, this budget is important.
• Paid Time Off – having paid time off is important in creating your work life balance. Other benefits can include the ability to work from home and schedule flexibility.

Understand future earnings and career potential

Remember that your early-stage career jobs will shape your late-stage career trajectory. Taking a position in a firm that is aggressively growing  providing ample opportunities to learn your craft or a firm with equity ownership potential are much more beneficial to you in the long run than a few thousand extra dollars per year maybe from another firm that does not offer the mentoring, learning opportunities, or career growth.  From working with hundreds of firms across the country, we have found the opportunities leading to the best long-term outcomes are those that provide mentorship and training.

Negotiating salary

You need to know what you are worth and if you aren’t sure what the going rate for planners is you can find more information here. If you understand your compensation and future trajectory at a firm, and feel the compensation is below your market rate or is at a rate too low for you to accept, here’s some tips on broaching the subject:

• Pick two or three key negotiating points. Some are easier to negotiate than others due to the out of pocket expenses. Some common negotiation points in financial planning firms include:
  • Salary or Bonus Potential
  • Job Title
  • Start Date
  • Vacation/PTO
  • Relocation Expenses
  • Remote/Virtual Work
  • Training, Association Dues, or Continuing Education Allowance
• Ask questions rather than make demands. If you’re uncomfortable negotiating, phrase the questions in a way asking what accomplishments you would need to reach a certain compensation or be eligible for the benefits you’re seeking. When you ask, be quiet, there is no need to continue to talk to further justify and let them respond.
• Do not negotiate on your compensation by email. While face to face is preferable, a phone call is generally most feasible. When you are presented with an offer and review it, schedule a time with the hiring manager to ask questions about the offer. Do not speak quickly and nervously. You will want to convey yourself as confident in your value, calm, and likable.
• Understand the going rate for your position and skillset. Make any counteroffer around fair and reasonable terms. It is not effective, nor professional to ask for well-above market compensation with the intent of settling somewhere lower or in the middle.
• Be prepared for them to say no. If the compensation piece is that important to you, you need to be prepared to walk away if the offer doesn’t meet your expectations or needs.
• While most firms will not revoke their initial offer, keep in mind you will be working intimately with the same people you are negotiating with. Be mindful of the social capital you use negotiating an offer, but also remember the firm has invested time, effort, and resource in you and by extending an offer, they are demonstrating they want you.
• Get any changes in writing in the form of a new offer letter.

Keep in mind, most firms want to make sure their people are fairly compensated and as long as you bring the subject up professionally, act respectfully, express gratitude for the opportunity, and communicate intentionally in a face to face or phone setting you greatly increase the odds you will get what you want.

If you have questions about what the career opportunity landscape looks like, handling negotiations, or want to brainstorm ideas, reach out to us at candidate@newplannerrecruiting.com and/or see our full slate of job listings online here.