Advice firms will "never be able to compete" with big banks over staff wages – but having a succession plan can give them an edge in retention, says a business consultant.
While banks can win a bidding war on salaries, Strategic Consulting and Training managing director Jim Stackpool told ifa that advice firms have a strong value proposition for potential staff members looking for "a career and not just a job".
"Our line is, unless there is a real solid succession plan in place, you’re never going to be able to compete with the wages that they can probably get elsewhere," Mr Stackpool said.
"Investment firms and banks and other groups are going more and more into direct advice. You won’t be able to compete with their wages but you will be able to compete with something they can never offer, which is greater control over the up-and-coming adviser’s destiny," he said.
Mr Stackpool said advisers looking for the ability to put their "fingerprints" on a business will value the ability to grow within a firm more than a large salary.
Succession planning, through an equity share arrangement, has the dual benefits of keeping staff involved in the business and allowing the advice firm access to their full potential, he added.
"More and more I think these advisers who are jumping out of the ‘puzzle palaces’, they’re looking for some form of structured succession plan," Mr Stackpool said.
"One of the key things about succession planning is [that it is] really only built for people who want a career … [so it] shows how someone can leverage their hard work and effort over a much shorter period of time into a position of ownership and control," he said.
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