A critical element in the success of any small business is its ability to recruit, reward, and retain talented advisors and support staff. To this end, equity is often used in addition to, or in conjunction with, compensation to achieve these goals. Synthetic equity is a tool set that can provide ownership-level benefits without buying or selling actual stock in an advisory business.
A few situations where leveraging synthetic equity can be useful are:
Synthetic equity, just like actual equity, can be used to reward and retain the necessary key employees to grow a strong and valuable practice. As with full equity, synthetic equity can re-center the focus of a key employee, advisor, or producer, and encourage them to contribute—at every level—to a growing and sustainable business.
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