How to Offer Financial Planning as an Employee Benefit
Dear Advisors,
Every advisory firm I've worked for has offered financial planning as an employee benefit but I've never seen an employee actually take them up on it! True financial planning covers a lot of things I wouldn't want my employer to know. What if I wanted to a job change? What if I'm looking to start having kids of my own? If my employer knew what's going on behind my professional veneer, they would think I'm not focused on my job and moving the company forward. Ultimately, they wouldn't be professional with me and give me that promotion, or that raise, that I've been working towards.
Although there are challenges to offering financial planning as an employee benefit, there are so many benefits! Before we talk about how to structure the benefit, here’s a quick list of the reasons why it’s such a great idea:
Your employees will be financially prepared for retirement, and less stressed about money day-to-day. They’ll be able to enjoy life at home and be more focused at work.
They’ll be happy with their job, or they will know if it’s time to make a change. They can get tips from their advisor on how to bring that up with you.
Together, you can set a clear career path. Once you understand your team, you can set business goals that you’re more likely to achieve.
This ultimately leads to a healthier, more open company culture. Your employees will know that you truly want what’s best for them.
They’ll begin to understand how much our work means to our clients. When they love what you do, they’ll tell people about it!
Offering financial planning as an employee benefit is a great way to invest in your team and retain great talent. So, how do we offer financial planning as an employee benefit in a way that gets our employees excited and engaged?
Exchange Financial Planning Services - One of my employers wanted to exchange services with another local advisor to do financial planning for each other’s employees. This could either be free or at a discount. At the time, it was hard to find a local firm offering true financial planning. We ended up doing financial planning for each other on an as-needed basis. Based on that experience, I think there is a lot of value in working with an outside person to talk with me and my spouse, and to provide accountability.
Financial Planning Reimbursement - The XY Planning Network (XYPN) offers financial planning as benefit for their employees. Each employee gets $500 up-front, and $50 per month to hire an XYPN member to be their financial planner. This is a great option because the employees get to choose their own advisor! If you’re not familiar with XYPN, it’s a company that offers a bundled package of discounts, benefits, services, and a great community for their fee-only financial advisory firm members.
Financial Planning Resources - Ellevate Advisors is one of the few companies that specializes in financial planning and life planning for advisors and their employees. The up-front cost for new plans is $1,500. The minimum for ongoing financial planning is $3,000 per year for advisors and $2,000 per year for employees. You can choose whether you want to pay annually, quarterly, or monthly, and you can cancel at any time.
As you can see, the amount of the employee benefit would not cover the entire cost that firms charge these days. As the employer, you don’t want to cover the entire cost. If employees get financial planning for free, they’re less likely to see a lot of value in it. Paying something out of pocket increases engagement and thus increases the value of the benefit you’re trying to provide.
Most companies in the United States offer a 401k with a free "retirement calculator". We all know that most people need much more than that. As advisors, we’re passionate about helping people achieve their financial goals. Doing this for our employees will change their lives and help you build a happier healthier team. At the end of the day, it’s one way to start building a business that lasts.
Warm regards,
Brooklyn
P.S.
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