“The basic principle which I believe has contributed more than any other to the building of our business as it is today, is the ownership of our company by the people employed in it.” -James E. Casey
Financial planners either have ownership in the firm they represent or are employees in those firms? Does it matter? Should we care? Will it make a difference? The answer may or may not be obvious.
If a crummy meal is served, do we demand to speak to the server?
If a refund on a faulty product is denied, do we demand the salesman?
Probably not. “I need to speak to the owner” is the most common demand. Why? We know the owner is invested. They’re invested in the service, in the brand, and in the customer experience. It could be argued that everyone there is invested. But, no one is quite as invested as the owner. We know this instinctively.
There are distinct advantages to working direct with an owner, especially in personal financial planning firms:
The long-term nature of the relationship is more stable. When someone owns, they tend to stay. We want our relationships to be stable, less transient. There are financial planners out there who are on their third….fourth….fifth…..sixth company. Why? If there’s no ownership, the planner looks for the firm that will give them the “bigger better” deal. Good for them, not good for the client. Ownership has built in stability.
Incentives are better aligned. We want to be on the same side of the table with our advisors. With service professionals, we want to eliminate potential conflicts of interest. Working with an owner better aligns the client and planner’s interests. Full disclosure is valued. Long-term service replaces short-term product solutions. The owner is paid direct by the client. The alternative is the client paying the company and the company having some type of arrangement with the financial rep.
Status quo is the enemy. We live in a world of rapid change. Technology is advancing at a fast clip. The name of the game is constant progress. We need to adapt. Owners are able to make those constant improvements. Others are required to wade through the bureaucracy of their organizations. There may be several levels of approval, layers to sift through, and committees to engage. Ownership encourages progress. Lack of ownership can encourage maintaining the status quo.
Independence and accountability are cultivated. Which response is more desired?
“Let me see what we can do” OR “We’ll take care of that for you”
One response suggests taking full responsibility. Personal accountability is high. There appears to be an obvious and direct ability to act. Authorization is already established. The principle of independence is set and ready for implementation. Owners are authorized to act on our behalf. Others may need to seek approval from higher ups and “get back to us.”
The service level is higher touch. In financial planning, bigger is not better. Bigger tends to be more complicated, less team-oriented, and lacking a family feel. Owners tend to operate in small to mid-sized firms. There is a higher level of skin in the game. The financial planner’s name is stamped on the brand. They depend on the firm’s reputation in the community. There isn’t the same option to move on to another company and start fresh, leaving problems in the past. Owners are building their firms as we are building up our finances and our lives. They grow with us. The personal touch is felt in the experience.
Ownership is never a guarantee of anything. Nothing is a guarantee. If we’re looking for conditions, environment, or a set of circumstances to provide a guarantee, we will be disappointed. We can improve our odds of success. We can improve those odds by looking for professionals invested at the highest levels. Invested in their business. Invested in their people, their clients, and their legacy. This is done by having an ownership stake directly tied to results and service.
We need to have high standards. We need to insist on being stakeholders in our own lives and hiring others who take ownership in theirs.
“I cannot compromise or inhibit my independence.” -Walter Annenberg
