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Time to Rethink Your Employee Handbook

Most handbooks are all about the company when they really should be about the employee.

Helen Modly, CFP, CPWA and Sandra Atkins, CPA/PFS, 10/15/2015

As your business grows, it is critical to have written policies and procedures to standardize processes throughout your organization. Most firms have well-documented client policies to ensure each client receives a consistent experience.

From the moment a client walks through the door, there are procedures to follow regarding on-boarding, financial planning, annual reviews, and so forth. But these types of policies are equally important for creating a consistent experience for your employees. A well written employee handbook is a must when it comes to setting expectations for your staff and communicating the benefits they'll enjoy while working for you. And it can even serve as a recruitment tool in this very competitive hiring environment.

Most employee handbooks make for boring reading. They tend to start out with standard language about the fact that you're an equal opportunity employer and then jump right in to your harassment policy--not very comforting reading for your new employees (who are likely to be the only people who read the handbook).

It certainly is important to cover these issues and to set out a clear understanding of your office policies with respect to your staff (hours of operation, dress code, privacy policies, and so forth) and the benefits you provide to them (vacations and paid time off, holidays, life and health insurance, 401(k), etc.). However, most handbooks are all about the company and not really about the employee.

Setting the Tone
Our most effective marketing materials focus on the benefits that clients will experience when working with us. We no longer say, "We will provide you with…" and instead we say, "You will benefit from…". The same approach should apply to the most important communication document you have for your employees.

Rather than dictating the rules, invite your employees to follow them. For instance, your old handbook might have a "Safety and Security" policy like this:

"It is important to follow all safety and security measures prescribed by the Company. You are required to immediately notify management of any injuries that occur in the office or on a client's property."

Change it to "Your Security":

"You are valuable to us. If you injure yourself while at the office or at a client site, please notify your manager immediately."

It says the same thing, but it carries a very different message.

Don't Forget the Culture
Office culture is very important to today's young advisors. They want to know how your office works--is the staff collegial and the work collaborative? Do you encourage staff to learn and take on more responsibility? What values are important to your team? The employee handbook is the perfect place to paint a picture of your firm--particularly if you plan to give a copy of it to prospective hires.

Rather than jumping right into the rules and regulations of your company, why not start with a section that describes who you are as a firm and what's important to you? This is informative for employees and sets the stage for how you expect to treat them and how, as a firm, you treat your clients.

What Should Be Covered?
Assuming that the handbook will be read mainly by new employees, it's nice to start off with a letter welcoming them to the firm. Let's say your company name is Grizzly Wealth Management (with a big brown bear in your logo). After the introductory letter, divide the manual into sections:

The Grizzly Culture: In this section, talk about your firm and your culture. If you have a mission and vision statement, put it here. Give a little history of the firm. Talk about the values that are important to you and how you apply them to taking care of your clients and your employees.

The Grizzly Workplace: This is where you tell them that you're an equal opportunity employer and that you have a harassment policy. But more importantly, you explain how you expect them to treat relationships with clients, confidential information, conflicts of interest, and so forth. You also describe how you on-board new employees (and terminate them if need be). All firmwide policies should be detailed in this section.

Your Job at Grizzly: This section covers the nitty-gritty regarding the actual employment parameters: the hours required in a work day, when they'll be paid, what to wear, how the annual performance and compensation review works, the type of professional conduct you expect, and how you handle staff with professional licenses that require continuing education.

Your Benefits at Grizzly: This is probably the most important section for a new employee (and also for you with respect to enticing new prospects) since it defines everything you will do for them in the form of benefits. From life and health insurance to 401(k) plans to vacation and sick leave to bonus and incentive plans, you describe ways in which you will reward their value to your firm. You need to include a policy regarding maternity/paternity leave (if you have more than 50 employees, you have to follow the Family and Medical Leave Act guidelines). Also you should make clear what your policies are with respect to other leave for bereavement, jury duty, and other personal reasons. If you have professional staff, you can also cover how you handle the costs of continuing education and the time off you allow for staff to attend professional meetings.

Additional Resources: It's important for staff to know that if they have a problem or a complaint, it will be handled in a professional and non-retaliatory way. You should include your open-door policy, if you have one, and include a procedure for filing a complaint. Also, if you provide other resources such as coaches and mentors, you can describe those programs in this section.

The Serious Side
There's a lot of important information that goes in the employee handbook, especially for advisory firms that build their reputations on trust, confidentiality, a high level of professionalism, and a deep concern for their clients. Finding the right employees is critical to providing the service level that is promised and must be met and exceeded. The employee handbook has to set the standards in a way that allows employees to understand that every staff member is an integral part of the growth and health of the firm and must be serious about following the policies and procedures.

Starting off with an explanation of the culture and values of the firm is the best way to set the stage for the more serious messages in the handbook. Then, by addressing each section to "you," the employee should be able to understand more clearly how he or she fits into the fabric of your firm and why it's important to "follow the rules."


Helen Modly, CFP, CPWA, is President of Focus Wealth Management, Ltd., and a practicing wealth advisor. She is a member of NAPFA and Chair of the board for the National Capital Area chapter of FPA. She can be reached at info@focus-wealth.com.

The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

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