As you review your goals for the New Year, it is likely that growing your practice is a priority. That means differentiating yourself from the other financial professionals with similar priorities. It means finding your Purple Cow.
You might consider a strategy not used by many financial professionals: Employee stock Ownership Plans (ESOPs). Most business owners know little, or nothing, about ESOPs. That is generally true of their financial professionals as well. Not only can ESOPs differentiate you, they may be the door opener you are looking for.
ESOPs are qualified defined contribution retirement plans. In addition to helping employees save for retirement, they can assist a business owner with succession planning or to create liquidity for investment diversification. That is why an ESOP conversation starts with the business owner, senior management and/or board of directors.
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The conversation is strategic. It is as much about the retirement plan as it is about the very future of the company and the company owner(s). It is about the business owner as an individual and the company as an employer.
What are the characteristics of business owners and companies that might be open to a discussion of ESOPs?
- A closely held C or S corporation with strong profitability and cash flows and not highly leveraged
- A business owner who wants to develop a succession plan and/or a way to diversify assets
- An owner and company that value their employees
An ESOP creates multiple opportunities for a financial professional to grow his or her practice. It can be a great tool to gain new business owner and company clients. It can also provide you with additional revenue opportunities by generating investable assets, creating insurance needs, and providing access to the other qualified and non-qualified retirement plans.
And you don't have to be an expert to bring this idea to a client. You can work with ESOP consultants on the details.
So if you are looking for your Purple Cow in 2014, it may well reside in these four letters: ESOP.
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