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Connecting Compensation to Your 2026 Priorities
Align pay with what you actually want to accomplish next year.
Many firms treat compensation like a year-end cleanup project: look back, diagnose what went wrong, adjust payouts to “fix” last year’s frustrations, and move on. But compensation works better when it’s forward-looking.
If your 2026 plan includes meaningful growth—whether through acquisition, serving more households, or expanding capacity—your compensation strategy shouldn’t be a reaction to the past. It should be a tool that pulls your team toward the future. In our experience, you get far more movement when decisions are driven by aspiration rather than correction.
Compensation works best when it rewards the behaviors you want repeated—not when it tries to make things fair in hindsight. That doesn’t mean fairness doesn’t matter. It absolutely does. But “fair” is subjective, and subjective systems create confusion. Clear systems create momentum.
If you want 2026 to be a year of intentional growth, ask yourself this question: What outcomes matter most, and what behaviors create those outcomes?
Once you answer that question, you can then align your compensation strategy to reinforce those outcomes. Below are practical ways to connect compensation to the growth priorities we see most advisors focus on when they want meaningful progress in the new year.
Priority 1: Acquisition
Business value and the strength of acquisition are linked to multi-generational ownership, team retention, and growth potential. Acquisition partners (and buyers) don’t just evaluate your financials; they evaluate whether your team—and your leadership bench—will hold together through change.
One of the most overlooked signals is how equity opportunity shows up in compensation.
If equity pathways are unclear, the message to high performers is, “Your future here is uncertain.” If equity pathways are clear, the message is, “There’s a reason to grow here.”
Firms with clear equity opportunities in their compensation structure build multi-generational ownership and see 48% higher EBITDA* than their peers.
Compensation moves that support acquisition:
- Transparency in comp philosophy and progression: You don’t necessarily need to publish everyone’s pay, but you should clarify how people grow (and what it takes).
- Retention-driven incentives: Tie rewards to client continuity, team stability, and leadership contribution—not just production.
- Equity pathway clarity: Even if equity isn’t imminent, a visible framework builds trust and tenure.
Why it matters: Your compensation structure sends a clear signal to acquisition partners about how your firm actually operates, and whether the firm is dependent on only a few people or if it’s resilient and transferable.
Priority 2: Increase the number of households.
Organic client growth is not a solo sport. It’s a team sport. If adding households is one of your top 2026 priorities, your compensation strategy has to reinforce that reality. Too often, firms want to increase the number of households while compensation quietly rewards something else, like individual production with no accountability for onboarding quality, client retention, or capacity strain.
To drive household growth, make the incentives match the system you want.
Compensation moves that support household growth:
- Performance bonuses tied to household-related metrics, such as:
- New household onboarding completion
- New household AUM or revenue thresholds
- Client retention and referral indicators
- Team-based components that reward shared wins (because growth depends on operations, service, and planning—not just sales).
Why it matters: When compensation reinforces shared progress, you reduce internal friction and your team moves in the same direction.
Priority 3: Protect profitability while you grow.
Many firms push for more households or pursue acquisition and then discover they’ve created a bigger business with the same bottlenecks and less profitability. Compensation is often the silent culprit: incentives that encourage volume without efficiency or pay models that expand faster than revenue quality.
If margin is a 2026 priority (and it should be), compensation needs to reward efficient growth.
Compensation moves that support profitability:
- Incentives tied to revenue quality (recurring, durable, well-serviced relationships)
- Bonuses based on margin-aligned scorecards and not just top-line production
- Clear expectations that define what “profitable growth” means by role
Why it matters: Buyers don’t just pay for growth—they pay for repeatable, profitable growth that survives beyond the owner.
Priority 4: Retain and develop your next generation.
Most firms don’t lose next-gen talent because of pay alone. They lose them because the future feels unclear.
If you want 2026 to be a year of momentum, retention has to be more than wishful thinking. Compensation can reinforce professional growth, leadership contribution, and long-term opportunity.
Compensation moves that support next-gen development:
- Incentives for leadership behaviors (mentoring, training, client transition support)
- Compensation progression tied to skill-building, not tenure alone
- Visibility into long-term opportunity even if ownership is years away
Why it matters: A firm that can’t retain its future leaders will struggle with capacity, continuity, and acquisition readiness—no matter how strong the brand.
Looking ahead at 2026 priorities with compensation in mind.
When compensation is proactive and intentional, it does more than reward performance. It can improve retention, reduce confusion, focus your team on behaviors that drive your 2026 plan, and strengthen your position in acquisition, growth, and long-term value.
Compensation doesn’t need to be complicated—it just needs to be aligned with your priorities. You can test your current compensation approach with two questions:
- What are your top 3-5 growth priorities for 2026?
- Does your compensation system clearly reward behaviors that make those priorities achievable?
If your answer to question #2 is “not really,” that’s not a problem. It’s an opportunity.
Are you curious about where your firm's pay structure lands in comparison to peers and industry benchmarks? Participate in our annual compensation study to unlock a wealth of insights on compensation trends and to propel your 2026 growth strategy to the next level.
* Firms between $100M and $1B in AUM have a 48% higher EBITDA multiple, according to FP Transitions valuation and benchmarking data from 2023-2025 with a sample of over 2,000 valuations.
