P4 Cultures: The Key Elements to Creating Great Businesses by Creating Great Employees

Preparation. This element involves two crucial steps. First, business owners must prepare themselves to support their employees' success by setting aside traditional, top-down management approaches and embracing a more empathetic approach through coaching, mentoring, and trust. Second, they must create an environment that fosters employee excellence and implement a training program that educates employees about the firm and their role within it. This training should encourage resourcefulness, a willingness to make mistakes, and the confidence to seek help—what is now known as “compassionate leadership.” The goal is to cultivate employees who can manage themselves and take pride in the organization’s successes.

Pay. Simply offering high salaries to “star” advisors is not the solution. Thoughtful compensation packages are. We recommend linking part of an employee’s compensation to the success of the business, which aligns client motivation with the firm’s growth goals. Quarterly bonuses based on the firm’s revenue, coupled with a tiered payout system that increases as the firm’s revenues grow, can be powerful motivators. Additional compensation elements might include bonuses tied to profitability or client acquisition. Every aspect of a compensation program should be carefully designed with the central goal of driving revenue growth through client retention.

High salaries alone do not sustain employee motivation; they often produce only short-term effects. It’s essential not to use compensation merely as a tool to prevent valuable team members from leaving. Ultimately, money is not employees' primary concern. While they want to earn a fair salary, they also desire to contribute to something greater than themselves.

Perks. Offering the right perks can make employees happier, more motivated, and more loyal. Standard benefits such as medical insurance and retirement plans are expected. However, our research shows that the happiest employees work at firms that offer six key perks: unlimited vacation time, flex time, paid lunches, extended family leave, volunteer time, continuing education funding, and sabbatical opportunities. Although leadership may worry that perks like unlimited vacation time could deplete their workforce, these perks demonstrate trust—a powerful cultural element. In practice, we’ve observed that employees given such perks responsibly manage their time and lifestyles.

Productivity. The quality of the technology provided to employees sends a clear message about how their work is valued. When advisors are expected to use outdated or barely functional technology, their work becomes unnecessarily difficult. Asking them to manage a large client portfolio with inadequate technology can drive them to leave. Ensuring that advisory teams have access to up-to-date technology and a seamless digital experience is crucial to supporting employee satisfaction.

The P4 Principles are particularly relevant in today’s environment. Advisors have gone above and beyond to help clients navigate the pandemic. Now, as business thrives and many wealth management firms expand across multiple geographies with hybrid cultures, ensuring a cohesive culture in which employees can thrive is paramount. Firm leaders are, therefore, rightly prioritizing the advisor experience once again.

Unfortunately, many firms will only utilize one or two strategies to ensure their advisors’ happiness and productivity. Our research shows that firms implementing all four P4 Principles—Preparation, Pay, Perks, and Productivity—are significantly more successful in terms of revenue growth, profit growth, and employee loyalty than those that implement only a few. These four elements are complementary and mutually reinforcing, creating an advisor experience that is greater than the sum of its parts. Integrating the four Ps requires a commitment of time and resources, but the investment is far less costly than the impact of chronic employee turnover and low productivity.