Market recovery has bonus for planners
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There are tentative signs of discretionary bonuses in employee pay packets making a comeback in the planning sector.
Industry commentators point to anecdotal evidence of these bonuses, usually comprising cash and equity, making a return based on increasing revenue generation stemming from the growing confidence in the performance of the stock market.
Gary Fitton, director of financial services consultancy Remuneration Strategies Group, said there were “some signs” of bonuses returning in the sector as certainty in the permanence of the share market’s growth increases.
“[With the markets starting to strengthen], there is currently a focus among advice firms on offering both short and long-term incentives on the basis that they contain more bite for employees at current prices,” he said.
Financial Planning Recruitment Group executive director Peter Dawson said his firm was getting increasing reports from planning principals of a pick-up in bonuses being paid across the board, particularly to business development managers (BDMs).
A number of BDMs were earning very good bonuses on revenue generation up until the end of last year, when these were pared right back as the business flows dried up, he said.
He added that some long-established diversified advice firms have not changed their asset allocation significantly or at all during the global financial crisis (GFC), and they are continuing to pay and even increase bonuses.
Trevor Punnett, director of planning recruitment specialist eJobs, said bonuses have not been paid or were probably very low during the GFC, but now that markets are picking up and once profitability returns, he believes bonus payments are going to resume.
“In the last two weeks there have been more jobs placed on my [website] than I have had in nine months, so I think the market has started to pick up, although business profitability is still some way off,” he said.
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