From FPA Retreat 2011: ROI for Firm Owners


In one of the first breakout sessions of FPA Retreat 2011held earlier this week, well-known financial planning consultant Angie Herbers explored how to maximize investments in a firm of any size. Although she presented seven low-risk and high-return investments owners should implement (details below), she repeatedly made the point that your employees are key assets—from helping you build, spread the message of, and maximize your brand, to helping you discern where spending on the business will pay the biggest dividends.

She pointed out that firms that get the message right don’t necessarily do so by hiring the very best employees. In fact, surveys show that in firms that are most successful, employee ratings after three months are consistently lower than in firms that are less successful. But successful firms make the most of their employees, where less successful firms—even those with arguably more talented employees—show lower long-term employee evaluations, because a lack of clarity about core values or a lack of an investment in the culture or in employee growth ultimately makes talented people less effective.

7 Investments Firm Owners Should Implement:

  1. Know and be able to clearly communicate the goal
  2. Invest in the culture
  3. Build a brand: deliver confidence
  4. Learn corporate financial management
  5. Manage on growth, not profits
  6. Segment your services: give clients a choice
  7. Grow with people

Follow coverage of FPA Retreat 2011on Twitter (#FPARetreat11)

Mary Corbin
Director of Learning and Development
Financial Planning Association
Denver, CO

2 thoughts on “From FPA Retreat 2011: ROI for Firm Owners

  1. The problem with her strategy is that it’s not return on investment. It could be termed return on sales, but even much of what she talks about wouldn’t fly under that scenario.

    Her ideas are certainly good ones, but they don’t improve return on investment. ROI is a term that talks about investment today for a return tomorrow. We’re in the financial business and should understand the basics of finance and financial statements and principles.

    The financial services business has very little investment on the part of owners. That’s why much of the time, profit will equal excess cash. Understanding the drivers of cash, which she does talk about is a good thing, especially in this industry.

    How one decides to use cash is different from ROI. And, using cash on employees or building your brand is an expense, not an investment. An investment would be in computer equipment, software or website design. An investment is something that is expected to last for several years.

    I believe it’s important to use generally accepted terminology when talking about ROI. If we’re advising others on this topic, (and those of us who work with private business owners do) we should use terminology that has the correct meaning.

    • I disagree with Josh. Viewing cash used for professional development as an expense is a very antiquated, industrial age perspective. When do you think GAAP concepts were developed? During the industrial revolution. In a knowledge economy, employees are a much more valuable asset than fixed capital, especially in service industries like financial planning. Haven’t you ever heard of the term human capital? If managed properly, your employees should last longer than your computer equipment.

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