Crafting a Strong Key Employee Benefits Plan: Four Steps for Financial Advisors
October 16, 2024 | 3 min read
Crafting a Strong Key Employee Benefits Plan: Four Steps for Financial Advisors
In today’s competitive landscape, attracting and retaining top talent is more critical than ever. For businesses, key employees—those essential to driving growth and innovation—are invaluable. As financial advisors, it’s crucial to help your clients build a benefits strategy that not only rewards these individuals but also aligns with long-term business goals.
At Regis Financial Partners, we specialize in guiding financial advisors through the process of creating benefit plans tailored to each business’s unique needs. Here are four important steps to consider when advising your clients on key employee benefits:
1. Recruiting Top Talent with Industry-Specific Benefits
Recruitment in today’s market is highly competitive. To stand out, employers need to offer benefits that reflect the specific needs and expectations of key employees within their industry. Understanding what competitors offer is key. Encourage your clients to align their benefit packages with their recruitment goals—this may mean offering unique perks or adjusting for factors like remote work and regional cost of living differences.
2. Using Performance-Based Incentives for Motivation
Performance-based incentives not only benefit key employees but can help your clients achieve broader business goals. Incentives can be tied to company milestones, individual performance, or a combination of both. By offering such compensation packages to younger employees early on, your clients can foster a culture of commitment and growth. Financial advisors should consider the tax implications and long-term goals of these plans to ensure they align with the company’s overall strategy.
3. Helping Key Employees Achieve Financial Security
Your clients’ key employees are thinking about their financial futures, and you can help ensure they feel secure. Offering life insurance, disability insurance, or retirement plans tailored to these employees’ needs can provide peace of mind. For example, a nonqualified deferred compensation (NQDC) plan is a great way for key employees to defer taxes while boosting retirement savings. Such benefits are especially useful in cases where traditional 401(k) plans or IRAs fall short of covering the income gap in retirement.
4. Diversifying Income for Retirement Planning
Many key employees worry about how they’ll replace their income once they retire. Advisors can guide their clients to offer supplemental retirement savings options, like NQDC plans, that allow employees to set aside part of their pay or bonuses until later, when their tax rate may be lower. These plans are powerful tools for retaining key talent, as they can be tied to tenure and performance, ensuring long-term commitment.
Conclusion
Helping your clients design a comprehensive benefits package for their key employees strengthens their business and enhances retention. At Regis Financial Partners, we offer expertise and solutions that empower financial advisors to craft strategic benefits plans. Together, we can ensure your clients protect and retain their most valuable assets: their people.
Note: This content is for informational purposes only and not intended as tax or legal advice. Advisors should consult with legal professionals to ensure these strategies fit their clients’ specific needs.
