How do you know you’re making the best choices when it comes to running a successful financial planning business? Especially when some of the finer details may not be your area of expertise!
That’s why it’s always great to have a few Non-Executive Directors (or NEDs) around to help. Think of them as your businesses friendly neighbours, giving you the support and advice you need to get the job done.
In a recent episode of The Simpso… **cough-cough** Financial Planner Life Podcast, we spoke with Tom Ham, Financial Planner and Founder/Director of Calton Wealth Management. Tom has used the advantage of Non-Executive Directors on his team and encourages the use of them by any financial planning businesses on the rise.
One great thing about having NEDs on the Board? The breadth of knowledge and experience they can bring to the table. From legal and financial operations to business strategy, NEDs can provide invaluable guidance when it comes to decision-making.
Tom has made use of one of his non-exec directors to take care of distribution and B2B relationships, noting that,
“It’s going out and meeting Lawyers, Accountants and these businesses who have clients in common with us. These relationships take time to nurture, and I don’t have time to do that and run the business and look after clients, so that’s the bit he’s doing.”
But that’s not all the Non-Executive Directors can do! They can also give objective advice when it comes to matters of the business, as they are not connected to management or subject to a conflict of interest. Plus, they may even come with an incentive package that rewards them for the development of the business, further cementing their impact and making sure they’re doing their job.
Tom elaborated, saying,
“The non-execs that we have in the business have a shareholding. My view is, we should all want to see the business succeed, so effectively, you become a NED, you receive a bit of equity… That way we’re all aligned… We all want the compliance to be right, we all want good client outcomes, and we all want to see the business grow.”
Non-Executive Directors can also be instrumental in recognising potential opportunities or changes in the market. This helps the Board of Directors stay informed and aware of the industry developments, avoiding any negligent consequences in the future.
Plus, they can turn any Boardroom-debates into a party, with their presence contributing to the discussion and providing additional support to the Executive Directors. Tom’s had direct experience with this, stating,
“…She’s great on the detail, so, frequently if I’m thinking about doing something I’ll ring her up and say ‘What about this, what do we reckon?’ And I’ll get an hour on the phone with her”
But they don’t just make the meetings more enjoyable- one of the major advantages of Non-Executive Directors is that they can ask the tough questions. This encourages conversation and helps to ensure that the Board is making decisions based on the most informed opinions.
Non-Executive Directors can make a huge contribution to the success of a Financial Planning business, with the help of Tom’s guidance, you’ll have the perfect bunch of friendly neighbours in no time! Only one question remains; Who will you reach out to first?
If you haven’t already, check out the full episode with Tom Ham below. He was a fantastic guest and a fountain of knowledge.