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Dear Bev,
We are trying to figure out compensation for year-end. As COO, I am in charge of Human Resources and compensation. Our team has outperformed this year in terms of our asset and revenue goals, but not in terms of profitability. Of course, we don’t share all of the details of expenses with our team members because we don’t want them to figure out salaries, among other reasons.
From a top-line perspective it looks like a fantastic year. However, from a bottom-line perspective, we are not left with a lot to bonus out or profit-share. There are a number of factors determining this, not the least of which is large bumps in salary for three of our senior partners. They are hoping to retire in the next three to five years and want to maximize income while they can.
My question might be obvious, but it is about information sharing. I know the team is aware we have done very, very well this year because we share our goals and our achievements. I am thinking they will expect to be sharing in the excess. We don’t have a formal bonus program, but historically, we have always bonused or “shared” profits in years when things were going well. How do we message this?
Anonymous
Dear Advisory Team Member,
This seems to be a situation where you, in your role as COO, need to sit down with the partners and review what’s happened from a financial perspective. You might need to lay out specifically the impact of the increases of salary on the bottom line and the dilemma you are left with as a result. I make this recommendation without knowing anything about the personalities of your senior advisors or the culture of your firm, so please proceed with caution if they are not open to having a discussion like this.
There might be a chance the partners didn’t foresee the impact their decision would have on the rest of the team. Perhaps sharing the numbers could encourage them to “give back” a bit of what they have taken so there is money to share among the rest of the team. In addition to this approach, I’ve also seen senior leaders directly bonus individuals out of their own compensation.
If they are unwilling to do this, you will need to engage them in how they want to message what’s happened to the rest of the team. If your senior people are three to five years away from retiring, I assume they want a thriving, growing firm during this time, so they can continue to maximize income. If team members are outperforming the goals set, but not receiving any “reward” in the form of compensation increases, bonuses or profit-sharing, you might wind up with some disgruntled staff on your hands. If someone is openly disgruntled, that’s one thing. But I would worry that they could quietly start working less, looking for other jobs or just start caring less about team outcomes.
Again, I don’t know your people or your culture. Perhaps they will keep doing what they have been doing without recognition. That’s up to you to know and a risk you might have to take if you are unable to get your senior leaders to engage productively on this issue.
Dear Bev,
We’re a small team of five people. We have two lead advisors and one junior advisor, “Jon,” who is working on taking over clients from one of the lead advisors who hopes to retire in about three years. The two of us in support roles really enjoy working with our lead advisors. They understand us, they are flexible (we both have small children, and my colleague is a single mother). They also have reasonable expectations and treat us very well financially.
The problem is Jon, who is growing in his position. He came from the administration side and worked alongside us. Jon wanted to be an advisor and worked hard over a few years to earn credentials and grow into the role. However, he now treats us like we are useless because we are not revenue-producing. I would argue we are revenue-producing since we have excellent relationships with our clients. We are certainly revenue-protecting, because many times we are the ones the client is talking with about their plans.
As my colleague and I look to the future in our current roles, we are not going to stay if we are working directly for Jon unless he changes his approach dramatically. We don’t want to threaten to leave yet, as three years is a long time and something could change. That said, early indicators are not good. Do we say something to our lead advisors or do we take Jon out to coffee to give him the background on how we feel? We aren’t sure what to do, and neither of us is a boat rocker.
L.L.
Dear L.L.,
I say “yes” to both of your suggestions. Part of growing into a lead advisor role is learning how to coach and develop team members. It involves showing respect and gaining support through influence. Jon is acting in a way to drive a wedge between him and two key staff members (you and your colleague). Because of this, I believe you should speak to your lead advisor. But frame this in the sense of “coaching” and “teaching” Jon the things your lead advisors do so well when it comes to supporting the team overall.
Perhaps you could share your observations and note there could be an expectation — or assumption — made that Jon would know what to do as he was in the role previously. However, moving from peer to leader is not an easy transition for most people to make. Learning to navigate and work differently takes focus and dedication. With your senior advisor, I would not complain about Jon per se. Instead, I would make recommendations and suggestions you believe would be helpful to him as he grows into the position.
With Jon, you can definitely take him out for coffee and give him a more direct view of what you are experiencing. Because of the difficulty moving from peer to leader — and perhaps the stress he feels taking on clients that have been with a senior advisor for so long — it’s possible he doesn’t know how he is coming across. Sometimes we need someone else to hold up a mirror so we can see our actions through another lens.
The “revenue-producing” comment could have been sarcasm or his attempt to elevate himself away from the administrative side of the work. Jon’s intention might not have been negative, even though the way it came across was a bit insulting to both of you. Try, as objectively as possible, to share what he is doing and why it is impacting both of you. Let Jon know you want to be supportive as he makes this transition, but right now his actions are driving you both away. Remind him, from his time in the support role, how connected you and your colleague are to the clients and how it would benefit him to have you as part of his core team, feeling recognized, supported and respected.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022, 2023, 2024 and 2025. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
