Petr Borkovec (Partners): If you want people to do something, you have to pay them for it

In this episode of the CEO na ostří nože podcast, we talk to Petr Borkovec, co-founder and co-owner of the Partners financial group. He founded the company in 2007 with Radim Lukeš, when they left a large financial advisory network together with several hundred advisers. Today, alongside advisory services, the group includes an investment company, a pension company, a life insurer and a real estate fund, and it is building its own bank. In 2020, the group’s revenue exceeded CZK 2 billion.

The reason they left, Borkovec says, was an “awakening”. After several years in the industry, they understood how product fee structures worked and how much of clients’ money went to institutions, how much to advisers and how much flowed out of the country. They realised they could be paid the same while offering much cheaper products, and invest the savings in better service and technology. Leaving was risky. The partners took on debt of tens of millions of crowns. But their proposition was so strong that they repaid the first twenty million within three or four months.

From the start, they built the company on values that were turned into rules. Advisers receive uniform commissions so they have no reason to choose products based on what they earn. The company banned incentive bonuses from financial institutions. Every new adviser goes through supervision and certification. An internal “watchdog” checks new contracts and flags suspicious parameters. For people looking for quick money, that was too many restrictions. So Partners grows mainly by developing its own people. Groups of advisers who came from other firms, Borkovec says, mostly didn’t last. The culture gradually pushed them out because they didn’t agree with the company’s philosophy.

Borkovec describes two extremes. One is the corporation, where people are bound by rules and have no room for creativity. The other is platforms that simply pass on commissions, don’t care who works for them and see the client as someone they “don’t really care about”. Partners tries to sit in between: giving advisers enough freedom to grow personally while holding firm on values that affect the client. The key tool is pay. Borkovec quotes Simon Sinek: if you want people to do something, pay them for it. It long bothered him that advisers received most of their pay when a contract was signed and then had no incentive to keep looking after the client. Today, pay is spread over time and is only paid out if the adviser services the client in person regularly, at least once every two years.

The companies in the group are built on the same logic. Partners starts with advice and only then builds products and institutions that help it deliver a better service. Borkovec compares it to a shop that buys its own farm to get fresher produce without paying three margins. The bank is meant to be an extension of the advisory platform. Clients will have their accounts, financial goals, budget and contracts in one place on their phone. A “perfect financial service”, according to Borkovec, rests on three pillars: good advisers, technology and data.

What else will you learn in the podcast?

• Why the founders of Partners left a large advisory network

• How the company’s values are reflected in rules, commissions and supervision

• Why groups of advisers from other firms mostly didn’t last at Partners

• Why pay is the most powerful tool for shaping people’s behaviour

• Why Partners is building its own bank and how it differs from traditional banks

• Why Borkovec publicly criticises unregulated financial products

For Petr Borkovec, finance is a business close to his heart. That’s why, in his own words, what bothers him most is what Partners does badly or imperfectly. And that’s why he isn’t afraid to speak out publicly when products that harm clients come onto the market. A company, he says, must never stagnate. It has to keep evolving, because as clients grow, so do their expectations.