Wealth benefits Featured

5:52am EDT March 22, 2005
The days of big-time perks are over for many executives.

Increased shareholder scrutiny and tighter fiscal policies have reduced the number and types of perks that executives receive. But one benefit that many companies have realized is worth having wealth management services for top executives.

"Everyone's time is precious," says Michael Novak, principle of Chess Financial Corp., a fee-based wealth management firm in Pepper Pike. "The owner or CEO who is the entrepreneur and is trying to grow the company, his or her time is even more precious."

As a result, CEOs and other top execs at some companies are being offered financial planning services as a way of helping ease the stress in their personal lives so they can focus on the business.

"A lot of perks have been taken away from employees, and some for good reason," says Novak. "If you are a shareholder of a public company and see perks like private jet use or interest-free loans or others that may be abusive or excessive, you're going to question that. But if you look at financial planning services, that's a good thing for the CEO. They've got their own issues to deal with, and if someone is concentrating on their personal financial plan for them, they can concentrate on the business at hand."

The wealth management benefit can be set up in different ways. The CEO or top few executives might get an all-encompassing plan in which the company pays for everything, while other eligible members of the management team might have a cap on how much they can spend on services.

Novak says that the company should do some initial qualifying of prospective financial firms and narrow it down so that executives have three or four to choose from. Having a choice is important because different firms have different philosophies on money management, and some are fee-based while others bill based more on transactions.

"The company should be the driver of the decision on choices," says Novak. "They should do the due diligence for the executive. The company should also be following up each year and try to do a survey on how well the benefits are provided, and do they talk to the executive frequently enough."

Interaction is important for the executive to feel comfortable with the adviser.

"As specific as offering financial services are, it is a relationship business," says Novak. "I think the relationship, regardless of the way your financial planner bills, is the key driver."

How to reach: Chess Financial Corp., www.chessfinancial.com