Are Your Advisors Technicians or Advisors?

By: Amy Wirtz

I had a client describe the difference between a hiring a technician and an advisor just last month. We will call this client Mr. Jacobs. Mr. Jacobs called me to tell me about a hiccup he had with his new accountant. He was reviewing his end of the year books and saw that he had paid his new accountant four times what had paid his accountant two years prior. He was worried about the rising cost and called his accountant to tell him to justify this increase in cost and get it under control. Luckily these two have a great relationship. During the conversation the accountant reminded Mr. Jacobs that together they secured new financing at a reduced fixed interest rate, helped him convert from a cash basis to accrual basis and helped him save twice his fees in taxes. Mr. Jacobs called to discuss with me how his vision is changing on who he engages to be on his team. Mr. Jacobs opined that sometimes you need to spend money to learn and to grow your business.

When you are building your business transition team you should surround yourself with trusted advisers. Most business owners utilize the services of a lawyer, accountant and a banker, but do not consult with them in an advisory capacity. The definition of an advisor is someone who gives advice, particularly someone who is an expert in a field.

Owners are busy with the operations of the business and often do not have the time or the inclination to sit down with these professionals to seek the advice on the growth and transition of his or her business. At the beginning of each engagement, I seek to understand the role the professional advisors for the business. I want to know what role the respective accountant, lawyer, financial planner and banker play in their business operations. I will interview these professionals and learn what their current view of the business is and what concerns they have for the predicted transition. I want to know if and what they are involved in and if their advice has been utilized or avoided.

What I find more often than not, is the business owner has not spoken to the attorney since the incorporation of the business or the creation of their will when the children were small. The contact with the accountant is annual or bi-annually basis to discuss how much tax is owed. If they have a financial planner, they see him or her annually. When I inquire about life insurance policies and the service on the policy, most of my clients have no contact with the person who sold the policy to them and do not understand the benefits and negatives of what she owns. It is common for me to discover that the business owner hesitates to ask other professionals how to run their business.

Are you getting the most out of your team? How and when to you speak to your team members? When was the last time you discussed a strategic plan with them? Call to have a conversation about whether the professionals you engage are technicians or advisors.


An Interview with Amy Wirtz
Click here to watch the interview >

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