Partner Content

When financial counseling is an executive benefit, is the executive the only one who benefits?

© Shutterstock

Years ago, companies competing for talent added “perks” for key executives, including company-sponsored financial planning, with the company paying a stipend for executives to receive planning services. Over the years, as profits were squeezed, some dropped this benefit.

Today, growing businesses are again considering innovative benefits to attract the best talent. These companies recognize that not only can they attract top talent with company-sponsored financial planning but also that these programs benefit the company itself in the following ways:

1. Professionally advised executives are equipped to avoid mistakes that hurt their companies. If reckless behavior by executives is a symptom of the ills of corporate America, then company-sponsored financial counseling may be the cure. Properly advised executives are less susceptible to making mistakes regarding securities, tax and corporate laws and other regulations.

Further, properly counseled executives will have a better understanding of securities law such as insider-trading rules, applicable filing and disclosure rules, and the Sarbanes-Oxley Act. Good advisors will take steps to implement, monitor and coordinate an executive’s compliance requirements by assisting with 10b5-1 trading plans while meeting company-share ownership requirements.

2. Executives who have their own affairs in order are better able to focus on their jobs. Executives who lack sound personal financial guidance may be forced to spend a disproportionate amount of time focused on their own financial affairs. In turn, these distractions may detract from their job performance.

Firms offering the best counseling utilize technology to provide their executives with current financial statements and tools reflecting the dynamic nature of their professional and personal circumstances.

Each executive’s investment, retirement and estate planning package is structured with a long-term outlook and in a coordinated fashion, while net worth, cash flow, retirement, education and tax projections reflect current circumstances, and model alternative scenarios.

Educating executives on the breadth and value of their own compensation and benefits can generate goodwill for the company.

3. Advice provided by an independent fiduciary can mitigate any conflicts that exist between executives and their companies. Many companies do not pay sufficient attention to the conflicts of interest between themselves and their executives. An executive’s decision to exercise an option, for example, or to sell shares of stock may be a decision in which the employer has a competing, or at least differing, interest.

In the negotiation of an employment or severance agreement, an independent fiduciary can provide valuable guidance as to the potential implications to the executive’s own financial plan.

4. Company-sponsored financial counseling is an effective way to deliver value to executives. An advisor who counsels multiple employees from the same company becomes familiar with the company’s benefit offerings, deferred-compensation arrangements and in-house policies and restrictions. Educating executives on the breadth and value of their own compensation and benefits can generate goodwill for the company. An often-unanticipated benefit is the reduced frequency of compensation and benefits inquiries individual executives then pose to human resources personnel.

5. While offering company-sponsored financial counsel to its top executives, the company can support all employees. Growing businesses are highly motivated to attract and retain newer team members who are driving the day-to-day business. While these employees may not have accumulated significant wealth, they still have concerns around their personal finances.

Smart companies can work with their financial counseling providers to come up with innovative programs that help the rest of the staff feel supported and educated as they accumulate wealth.

High-growth companies are recognizing the need to support the financial-counseling needs of their executives and leaders of the future. Those that continue to do so are positioned to win the war for talent and succeed in retaining their executives for years to come.

Read More from The Colony Group

Business Ownership

Disclaimer: Worth magazine is a financial publisher and does not recommend or endorse investment, legal, insurance or tax advisors. The listing of any firm in the 2019 Worth® Leading AdvisorsTM Program does not constitute a recommendation or endorsement by Worth magazine of any such firm and is not based upon Worth magazine’s experience with, or prior dealings with, any advisor. The information presented for each advisor, including but not limited to any related profile, statistical data, presentation, report, commentary, recommendation or strategy, has been provided by such advisor without review or independent verification by Worth magazine. Any such information is the sole responsibility of the advisor. Worth magazine makes no representation or warranty as to the accuracy or completeness of such information, assumes no liability for any inaccuracies or omissions therein and disclaims responsibility for the suitability of any particular investment recommendation or strategy for any person. Nothing contained in Worth magazine constitutes or should be construed as any form of investment, legal, insurance or tax advice or as a recommendation to buy, sell, hold or trade any securities, financial instruments or assets. Readers are advised to consult their legal, financial, insurance and tax advisors prior to making any investment or pursuing any investment strategy. Past, model or hypothetical performance is not indicative of future results.

back to top