FP Transitions, a provider of business valuation, succession planning, and M&A and growth services for financial advisors, announced the expansion of its FP Insights platform to include compensation benchmarking for independent advisory firms.
Beyond tracking just salary, the new tool examines how bonuses, benefits, ownership stakes and profit distributions fit into a firm’s broader talent and growth strategy, the Lake Oswego, Ore., company said today in a press release.
FP Transitions said its data draw on 7,292 compensation records from 770 advisory firms, collected as of July 28 across six size cohorts, from sub-$100 million shops to firms managing more than $1 billion. The company collects data year-round, it said, and refreshes the findings weekly as more firms sign on.
Early data runs pointed to four current compensation themes, the company said. Equity stakes, not raises or bonuses, offered the biggest financial upside for experienced advisors, though tenure and production alone didn’t guarantee a spot in the cap table. Firms using formulaic bonus structures reported higher total awards than those relying on management discretion. Succession planning needed to address valuation, financing and the path from employee to owner well before a transition took place, not just name a successor. And benefits packages grew more competitive as firms scaled beyond founder-led practices.
“Compensation benchmarking has traditionally focused on the question, ‘What should I pay someone in this role?’ We think firm owners should be asking a much broader set of questions,” Brad Bueermann, CEO of FP Transitions, said in the release. “How are we rewarding performance? When should ownership enter the conversation? Can our best people see an economic future inside this business?”
The compensation feature follows FP Transitions’ recent launch of its “estimated value index,” part of a broader effort to turn its valuation and consulting data into tools advisory firm owners can use ahead of a sale or succession event.