4 things accountants and financial advisors should be learning from each other right now

In recent years, there’s been a significant increase in M&A activity with accounting and financial advisory firms. There’s a clear benefit in providing a more integrated financial service offering to clients. However, it can be a real struggle to manage the differences in culture and behaviour demonstrated by people working in accounting and financial advisory environments. The transition from competition to collaboration requires a high level of trust and respect for the capabilities that both accountants and financial advisors bring to the party in adding real value to clients.

What can accountants and financial advisors learn from each other?

1. Communication with clients

For basic accounting and tax services, the relationship with clients is relatively transactional, with a clear set of outcomes for a defined fee for service. This may lead to a stronger focus on workflow production than client relationships. In giving financial advice, the ability of advisors to ask the right questions and to open up conversations so that financial needs can be clearly identified is a core skill. Accountants seeking to become stronger advisors to their clients should take notice of the way that financial advisors engage with their clients.

1. Streamlined workflow management

Accounting firms are characterised by a relatively streamlined production process with effective allocation of resources, use of technology and leverage of service delivery. This process allows services to be provided profitably in a competitive, price sensitive environment. Time cost analysis allows for identification of bottlenecks and constraints to production and turnaround. Financial advisors can reap benefits in considering what matters and tasks can be more effectively managed through effective delegation and leverage.

1. A strategic, forward thinking approach

It’s in the nature of compliance-driven services for the focus to be more in the past than towards the future. As a result, clients are often disengaged and partners struggle to demonstrate value beyond tax compliance. On the other hand, the mindset of the financial advisor is future-focused, with strategy playing a key role in maximising opportunities to build wealth. The process of strategic planning and decision making is one that accountants increasingly need to focus on as they develop stronger relationships with business clients.

1. Business development activities

There’s not much of a ‘sell’ involved in engaging clients for accounting and tax services. In most cases, new clients come from referrals and the decision to engage is a relatively simple one based on the completion of financial statements and lodgement of tax returns. In a financial advisory environment, there needs to be a stronger focus on the identification of client needs, the development of leads and opportunities and the presentation of proposals for client engagement. The sales pipeline is the only way to effectively manage business development leads in an advisory environment.

What other synergies do you see as the accountants and financial advisors associated with your firm try to engage with each other to add value to clients?

Outlined below are just some of the actions your firm may wish to consider in creating a more collaborative environment for accountants and financial advisors:

1. Outline the key financial advisory services that you and your firm can and could provide to clients. Identify who will be primarily responsible for service delivery
2. Use the pricing calculator template to establish standard fee agreement based on service levels
3. Put in place specific steps for formal client engagement in relation to service levels, including client involvement in making the decision about scope of work and fee for service
4. Identify key open-ended questions that will help the advisor to identify a value gap to create interest in ‘what we can do to help.’
5. Develop a formal checklist for moving a client from interest to engagement with advisory services.
6. Establish a formal client engagement process from initial rapport to confirmation and follow-up
7. Explore the nature of existing cross-referral relationships between financial advisors and accountants. Who is responsible? What is working well? What could be improved?
8. Develop a simple script to outline to clients the value of service integration and a team approach to service delivery.
9. Identify the key steps that you will take to commence ongoing advisory relationships. Consider both process and outputs.
10. Identify the key triggers for review of service levels and clients relationships including a change in client needs and a change in scope of work.

Originally published at High Tech Soft Touch.