Are your professional advisors fully supporting you?
This article considers your relationship with your professional advisors. These include bankers, accountants, bookkeepers, solicitors and financial advisors such as insurance and pension advisors. You will be relying on these firms and individuals to use their expertise and knowledge base to help you achieve your strategic and financial goals. Part of your advisor’s role is to explain what may be involved in meeting your future goals. Generally they will be qualified and regulated by a regulatory body (which may be a government body), They will charge you pre-agree fees for their services.
A good working relationship with your professional advisors is a key foundation of a strong business. Such a relationship should be built on mutual trust and respect. However, the very best of these relationships are true partnerships.
Moreover, your requirements will change and you will face and overcome new challenges over time so your relationships will flex.
A professional adviser is also there to make sure your stay compliant in an increasingly complex business environment. Don’t forget there is an ever changing regulation landscape.
My own experience with professional advisors
I work with bookkeepers with a single client and professional practices with 30 plus offices and almost everything in between. Matching the size, structure and scope of a professional practice with your business’s needs is important. You could easily need to use a full range of professional practices throughout or during your business career.
The many hours I have spent training professional advisors has taught me they often have very different styles and views. Be sure to consider your own characteristics when making your choices and don’t be reluctant to discuss problems or if your expectations are not being met.
Therefore, although this may seem to some to be common sense, we have seen many examples where a mis-understanding between a professional advisor and their client has had significant consequences.
Understand your professional advisors
- What qualifications do they hold?
- Are they regulated by a 3rd party regulator?
- Are they a member of a professional membership body?
- Do they have insurance cover in place for any wrongdoing by the advisors?
- What’s their background and experience?
- Do you know any businesses that are already advised by them?
Who is being advised?
Firstly, most professional advisors will want to be clear about who they are advising and importantly who their contract is with. You may be looking for advice for a company in your role as company director or you may be looking for advice personally.
A good example here is advice about the tax affairs of a company and separate advice about your personal tax affairs. A further example could be if the shareholders of a company are looking for advice regarding their rights to remove a company director.
Therefore, you could end up conducting a variety of roles within your company and need advice on how something affects those different roles.
Are you clear on what advice you need from professional advisors?
This isn’t as silly as it sounds. If you’re unsure of the legal, practical and commercial implications of something, you may not be clear on what help you need. Most professional advisors will supply Terms of Engagement which set out the details of their professional obligations to their client. It might be worth double checking what that actually means your business will be getting help with.
A common example is the scope of the role of an accountant when advising a company. I would recommend building advisory time into any annual agreement for payment to your accountant. That means that you won’t live in fear that the fees will rocket every time you speak to them.
Terms of engagement vs expectation
Your Professional Advisor will usually require you to sign a Terms of Engagement letter that includes the legal terms of their duties to you and your duties to them.
Be clear of what you need to do for your advisors within the agreed timeframes, or you risk costs growing if missing a deadline leads to more work for your advisors.
An example of this may be providing information to you advisor so that a statutory deadline could be reached.
Who will be advising you and who will be delivering the service?
A professional practice will have different tiers of staff with a range of experience, qualification and speciality. It is normal that the person(s) that is giving the advice may not deliver the service.
There will often be a lead contact point for advice and a lead contact for delivery of a service. There a also professional advisors that operate on their own without a team around them.
It’s important to consider what range of services will come from you chosen advisor. Your requirements could also need your advisors to retain a 3rd party advisor to advise them where matters become very specialist. It’s good to know that such a resource is available should it be needed.
Advice vs compliance
Consider whether the help that you need is to comply with a legal requirement or to advise on a specific issue. Compliance matters tend to more generally available and cost less than an advisory service that can be more specialist.
Don’t forget that compliance will help to manage risk which leads to more time to concentrate on developing your business.
The importance of developing your own knowledge
Knowing what questions to ask a professional advisor will help to get you to the right information more quickly.
In addition, soak up and question any advice that you receive.
There’s a lot of information in the public domain but there can be no substitute to getting the right advice based on your own unique circumstances from experts in their field.
How are you being charged by the professional advisor?
Be clear on what costs you will be paying and when payments are due.
However, be careful that if you change your requirements during a relationship that you are clear on what additional costs that might incur.
How long are you committing to?
Is this a one-off requirement for help or do you expect to need this help for foreseeable future?
There can an advantage to building a long term relationship as you get to know your advisors and your advisors know your business better.
In conclusion, it is difficult to imagine any business, whatever it’s size or reach, not benefiting from professional advice. The right advisors will enable business owners or managers to adapt and move forward with confidence. This is so very important in the current changing environment and the potentially challenging times ahead. Working through our article Covid-19 Business Survival Guide will help you to determine exactly what help you could benefit from.