How you manage advisor compensation can make or break your business. Commission miscalculations and lagging payroll processing can erode confidence and cause significant frustration for your top producers. If you let these issues persist, you’ll start seeing your best reps heading for the nearest exit.
To keep your reps happy and your business thriving, you need a compensation plan that’s simple, efficient, and accurate. The best way to ensure your plan runs smoothly is to invest in high-quality commission management software.
Here are four ways commission management software can boost morale and retain reps:
Few things frustrate reps more than not getting paid on time because of administrative issues. The potential for delays and compensation errors is much higher when you’re relying on a spreadsheet or some other manually intensive system to manage payroll. A well-designed commission management application can remove many of these obstacles. When you have a tool in place that can give your reps fast, automatic, and accurate commission reports, it builds trust and leaves them more time to focus on taking care of their clients.
According to a 2016 study from Kehrer Bielan, advisors in firms that have multiple compensation plans “have 15% higher average annual gross revenue, produce 148% more advisory business, and administer 19% more assets.” A compensation approach that uses separate plans for different classifications of advisors can tangibly improve both individual advisor performance and organizational success. But those benefits can be hard to realize if you’re using a simple Access database — or worse, an Excel spreadsheet — to manage payroll. That’s why it’s critical to have a tool like high-quality commission management software to help easily design and implement robust compensation plans.
A top priority for your reps is being able to track how much they are expected to earn each month. Providing this information quickly and reliably can be impossible if your firm still uses spreadsheets or other outdated systems that require a lot of tedious manual input. The automation provided by commission management software can make this process much more feasible. This software can automatically take in daily transaction and commission data, run that data through the appropriate compensation plan, and provide your rep with a current view of their commission. This functionality makes reps’ lives easier and keeps them engaged with the back office team if there are any discrepancies.
Turnover and a loss of institutional knowledge can pose a significant threat to firms that use older systems for tracking and administering advisor compensation. As the individuals who originally built your system or spreadsheet move on, there are fewer and fewer people on your team who understand how to access and use the system, which can lead to disruptions in payroll processing and other internal services. That’s why web-based compensation management systems are so important. They ensure that your compensation plans and structures are held in a place that’s easy to access and use for all team members as your firm changes and grows over time.
With so much at stake when it comes to advisor compensation, finding the right partner for managing this side of your business is crucial.
At EAI, we have years of experience crafting robust compensation software to help financial firms thrive. So, if you’re ready to kick your clunky spreadsheet to the curb, reach out to us to schedule a demo! We’d love to show you how we can design a unique solution for managing commissions that will make life easier for your reps and your compensation team.