CPA advisors continue to debate what pricing and compensation strategies best fit their culture. Advisory firms seek to find the specific method that charges clients fairly and allows them to pay simply, and in which the firm receives adequate compensation for all its services, combined with the perfect compensation structure to incentivize the best employees. In today's world, advisors speak of improvements, but not perfection.At the core of the issue is the balance between individual performance and success, and that of the overall firm. "Overly rewarding individual performance sometimes encourages hoarding of clients that limits the firm's ability to grow," says Rebecca Pomering, CPA and principal at Moss Adams Consulting Services, in Seattle, who leads the firm's compensation consulting practice. "To achieve a long-term strategy of institutionalizing the client relationship, most firms have to make dramatic changes to their compensation plans."
The decision should be based not on formulas but on the strategy for the firm. Get away from the ownership compensation model and place a number on everyone's value, says Pomering. "We see a positive trend in our surveys toward advisory firms compensating employees in a business-like way," she says. "Even smaller independents are moving up the sophistication scale to rewards based on the long-term success of the firm, rather than short-term, production-focused goals."
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