The dream of imposing term limits on Congress probably won’t ever happen, but a financial planning firm in Columbus, Ohio, is cooking up a term-limit plan for its key leadership positions to foster next-generation leadership.
When Summit Financial Strategies’ longtime president and CEO Ted Saneholtz decided late last year to turn over the reins to Samantha Macchia, effective at the start of 2016, the management committee at the 28-employee firm started talking about a plan to institute term limits on key leadership positions. Macchia says they haven’t yet nailed down the length of the terms, but says they’ll probably be modeled after a U.S. president’s eight-year maximum.
Part of the appeal is making sure the company doesn’t get stale. “I think it’s good for the firm to have a new person and a new set of eyes because over time you can get complacent about things,” says Macchia, who in 1996 was Saneholtz’s first hire at his then-fledgling financial planning firm.
Today, Summit has roughly 660 accounts with nearly $900 million in assets under management, held mainly with high-net-worth individuals with at least $1 million in investable assets.
The other motivation behind the term-limit idea is to encourage younger employees to get more involved in the firm’s operations, provide them with career advancement opportunities and, in effect, sustain the company’s succession plan.
“Our whole succession plan is based on selling internally,” Macchia says. “We could get more money if we sold externally, but we’re trying to build this to be an ongoing business. To do that, we need to build really good financial planners as well as leaders who can step in and make business decisions.”
Part and parcel to that is Summit’s all-inclusive business model where everyone can give their three cents on how the firm is run.
“Our plan is that newer associates will have the same ability to develop their leadership and management skills to make decisions as we did when the firm was small,” Macchia says. “When I was employee number two, I was 26 years old and never ran a business before and just got thrown into making big decisions that impacted the clients and the firm.”
She notes the company has eight committees and anybody can join any committee. “It’s about finding something you’re passionate about and want to contribute to, and once you’re a committee member you’re expected to contribute and follow up on any issues, and ultimately make decisions that will bubble up to the management committee and impact the firm. I think that helps get buy-in on decisions.”
It seems to be working, given the firm’s high rate of employee retention—just three people have left the firm during the past handful of years, and most employees have been there for years, according to Macchia. But such retention could be a roadblock for ambitious young financial planners looking for advancement.