This article is written by Lewis Byford as part of Money Marketing’s brand new hub, Financial Adviser 2B. For more great content and to see the original post, click here.
Employee ownership has gained significant traction as an alternative business model in various industries, including the financial planning sector.
I want to explore the benefits that employee-owned businesses bring to the table, specifically within the realm of financial planning.
First, it’s worth looking at what exactly an employee-owned business look like and how it contributes to the industry’s success.
An employee-owned business, also known as an employee-owned company or an employee-owned enterprise, is a business structure where the employees hold a significant stake in the company’s ownership and decision-making processes.
When employees have a stake in the company’s success, they are more likely to go above and beyond their duties
Rather than being solely owned by external shareholders or a select group of executives, the employees become direct beneficiaries of the organisation’s performance and profitability.
In an employee-owned financial planning firm, the planners themselves are active participants in shaping the company’s direction, culture and values. They have a genuine say in decision-making processes, allowing for a more inclusive and collaborative work environment.
Let’s look at what advantages that brings.
Commitment and motivation
Employee ownership fosters a sense of pride among team members. When employees have a stake in the company’s success, they are more likely to go above and beyond their duties. This heightened commitment and motivation translates into improved client service, higher client satisfaction and stronger business results.
Alignment of interests
With an employee-owned structure, the interests of the employees and the company become aligned. Financial planners are directly invested in the success of the business, which naturally leads to a focus on long-term value creation rather than short-term gains.
This alignment helps in cultivating a collaborative and cohesive work environment, with everyone working towards a common goal.
Talent retention and attraction
Employee ownership can be a compelling factor in attracting and retaining top talent. In the financial planning sector, where expertise and client relationships are paramount, the stability and potential financial rewards offered by an employee-owned firm can be highly appealing.
It creates an environment where employees are more likely to build long-term careers, leading to a strong team with deep expertise.
Continuity and succession planning
Succession planning is a critical aspect of any financial planning business. Employee-owned firms often have better continuity plans in place, ensuring a smooth transition of ownership and management.
The ability to groom and promote talent from within the organisation ensures the firm’s culture, values and client relationships are preserved, contributing to long-term stability.
Entrepreneurial spirit
Employee-owned businesses foster an entrepreneurial spirit within the organisation. Employees are encouraged to contribute ideas, take calculated risks and drive innovation. The collaborative nature of these firms often results in the development of creative solutions, enhanced service offerings and the ability to adapt to changing market dynamics more effectively.
Greater client confidence
Clients often perceive employee-owned businesses as more reliable and trustworthy. The alignment of interests, long-term focus and commitment displayed by employee-owners instils confidence in clients. Knowing the professionals handling their financial planning are also owners of the firm can strengthen the client-adviser relationship and build long-lasting trust.
Employee ownership brings numerous benefits to the financial planning sector. From increased commitment and motivation among employees to the alignment of interests and enhanced client confidence, employee-owned businesses have proven to be successful models in this industry.
The combination of financial expertise, a shared sense of ownership and a client-centric approach creates a winning formula for sustainable growth and client satisfaction.
You can read other articles we have written and feature in the media here.
If you have any thoughts around this or have any questions, I would love to hear from you.
Email: lewis@antonygeorge.com
Phone number: 01268 669 313
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