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The big debate: Should you give out free advice?

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The question of whether firms should give free advice is one the most hotly debated topics in the profession. After a year of firms giving away hours of free advice and support, four practitioners debate the biggest issue of the day.

21st Jun 2021
Community Assistant AccountingWEB
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To give advice or not to give free advice - that is the question.

As a profession, it can be tricky to know where to draw the line with what constitutes general goodwill and just plain freeloading with dishing out advice to potential clients. The events of the past year have made knowing where to draw the line even more of a minefield. In particular, accountants wrote off hours of billable time supporting clients with furlough claims, but this charitable endeavour has not bore fruit for practioners now the restrictions are easing.

The topic has continuously sparked debate in Any Answers, with both sides firmly backing their corner - but which side are you rooting for? We spoke to four AccountingWEB members to hear their arguments for and against giving out free accountancy advice in their practices.

The argument FOR giving out free advice

A telephone with a card next to it with Free advice sign
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Duggimon - AccountingWEB member

I don’t think the knowledge and expertise I have is worth so little that I have to guard it closely. I’ve spent a long time learning the ins and outs of my profession and that knowledge is valuable, but the value isn’t only measured in fees.

We live in a society, and part of that concept of society is that those with more help those with less. Knowledge is a resource and should be shared where practical to do so, provided it’s not to your detriment. This is all a bit philosophical but what it boils down to is that if a person comes to me and by virtue of my knowledge I can, with very little effort, make a big impact for them, then I should do so. I lose nothing, they gain a lot, it would be wrong of me to do otherwise – the end societal impact is positive.

I can give a recent example – a nurse called me and asked about doing a tax return for her. She’s on PAYE but had expenses not reimbursed by her employer. I asked her a couple of questions, established these weren’t significant, and told her how she could find and fill out a P87 form to reclaim them herself.

This cost me 15 minutes – she gained the knowledge of how to reclaim £50 - £100 per year. My other option would have been to take her on as a client – I couldn’t very well charge her more than she was reclaiming from HMRC though, so the pressure would be on each year to do the work in less than half an hour, including AML verification and other onboarding and communication. Or I could just help her. Why on earth would I not?

Nigel Henshaw - AccountingWEB member

In general practice, ‘advice’ is given on many different subjects and levels. This could range from ‘what software is best for me’, a question answered in two minutes, to ‘how can I save tax’, a question that would require a much more in-depth discussion.

My general position on this is that I am happy to have a conversation for no charge and provide an opinion up to a point. With experience you should be able to determine where that point is, and you should be able to ascertain whether or not someone is a freeloader.

For example: 

Someone calls and says “my mate down the pub said I should be limited – at the moment I do my own tax”. This could go either way – a short conversation should establish the facts and an opinion could be given as to the viability of going limited through a brief discussion of pros and cons. It’s unrealistic to charge a fee for this but a fee could result if he wants to explore it further.  

The initial meeting is my chance to sell my services and show the individual that I know what I am doing and that we can work together. If I was to say I can help you with that but it will cost you, I don’t think I would gain many clients! 

Someone in the original post mentioned that a roofer would not work for nothing. If I had a leaky roof I would expect to be able to call on a roofer to come out and quote me a fee – I obviously would not expect his reply to be "I will come out and look but it will cost you".

Click here to delve deeper into NH's full argument.

The argument AGAINST giving out free advice

Terms of payment
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FirstTab - AccountingWEB member

My experience has proved that accountants in practice, compared to solicitors, give too much advice without charging a fee for that advice. This may be due to a lack of confidence, or a keenness to present a good impression to potential clients in order to sign them on.

Accountants have spent years acquiring specialist knowledge and skills. This has value and should NOT be given away for free.

The reason clients expect a free service is because as accountants we have shot ourselves in the foot by being ‘nice’ and overly helpful without a return. Being nice does not pay the bills. We can be ‘nice’ but still charge for services.

I have not set up to be nice to clients or to help the community. I can do this outside my business. Being profitable would enable me to do this.

I want to run my practice as a business. That means advice, outside my engagement, I will continue to charge for. My case is weakened by ‘nice’ accountants giving free advice. It makes it very difficult to get clients to pay. 

My plea to my peers is to please STOP giving away your years of knowledge and experience. It does not create goodwill. It shows you are desperate and you are not helping our profession. You are NOT being ‘nice’. 

Sharon Pocock

It’s interesting because this last 15 months has brought out the worst and the best in people. We’ve got some people who are so grateful for what we’ve done for them, but we have got some people who’ve had stuff for free and now that we’re quoting them for services they’re saying no. It is amazing how short people’s memories are - it’s disappointing.

It’s dawned on me more and more how little attention I’ve paid to my kids and family during all of this. I was just blinkered, either doing webinars or calls, and not paying any attention to homeschooling at all. There’s things like that that we’ve sacrificed. You wouldn;t talk to clients about that necessarily, unless you had a really good relationship.

Steve Briginshaw at Clarity has a great idea that he used in his business - if you’re doing work for free, invoice it and then credit it. Perhaps with hindsight we should have done that a bit. We started charging for furlough around June when the rules changed, but until then we did it for free. We do charge now, but not what it costs. It’s still a loss making exercise.

Now is about reviewing all your clients, what they’re getting, what they need, and having those conversations with them. The way it’s been this last 15 months with doing stuff for free can’t continue. It’s not sustainable.

Sharon Pocock shared her thoughts in an episode of Any Answers Live, which is available on demand to watch anytime here.

You decide!

Now that you've heard both arguments, it's time to decide which side of the debate you're on. Are you for or against? You decide!

Comment below with your stories and viewpoint.  

Replies (21)

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By Justin Bryant
21st Jun 2021 14:34

A much better and more interesting question is should you underwrite the full consequences of your wrong advice for free (or sensibly exclude that risk in your LoE). See: https://www.lawgazette.co.uk/news/supreme-court-clarifies-duty-test-in-g...

Thanks (3)
Replying to Justin Bryant:
By Duggimon
22nd Jun 2021 09:57

I would absolutely not give out any free advice were I not 100% confident in its absolute correctness. This is about those situations where by virtue of your professional knowledge, the answer to a question is as simple as 2+2 for you, but remains obscure to the questioner.

I would not concern myself with the matter of professional indemnity regarding the question of 2+2, I am confident enough nobody would be able to argue it isn't 4 to give the answer out for free, and it would cost me money to charge a reasonable amount for it.

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By carnmores
21st Jun 2021 16:22

why do i have to go to Twitter to vote?

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Replying to carnmores:
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By Hugo Fair
22nd Jun 2021 11:37

Symptomatic of the mindset of those who believe that nothing is (or should be free) ... the need to go via Twitter that is, not your comment!

I wouldn't use Twitter (or Facebook and a host of others) even if you paid me, so I'm not handing over my details to the money-grubbers just to record that free advice (or free opinion as it often is really) is fine by me.

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By eppingaccountant
22nd Jun 2021 10:03

Oh dear FirstTab, I totally disagree with you. I am happy to give out free advice where appropriate (and by that I mean where I can tell that the person asking is not a liberty-taker) and I AM being nice and there is nothing wrong with that!!!

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By practice for sale
22nd Jun 2021 10:10

Its not binary. There is no 'Yes' or 'No' answer to a question this big. the only correct answer is 'It Depends'.

If someone asks you a question for which you need to do work in order to be able to answer, then the answer is charge for it. If the answer puts money in their pockets, I charge for it. I charged for all furlough claims from day 1, modestly but to cover my costs, but I did not charge for loads of telephone conversations about what help and support was available and whether they qualified for it. Selfishly that 'free' work was intended to make sure I had as many clients at the end of all this as possible.

So for me, the answer remains 'it depends' and I'll consider each on its merits.

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By Paul Crowley
22nd Jun 2021 10:11

Not exactly a yes and no question is it
Judgement always comes in
I am not Citizens advice
But I would rather give out a bit free than have a £100 fee client.

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By Self-Employed and Happy
22nd Jun 2021 10:34

Depends what constitutes advice, the new Capital Gains on property is a good one, we have a system whereby we simply can't be bothered to do the submissions on behalf of the client, HMRC won't add it as part of the Accountant Portal so why should we bother.

So we make sure they have a Government Gateway (ie send them instructions on how to get one if they don't), we charge a small amount for the calculation of the CGT but then they are responsible for entering the figures via their own gateway within the given time / making payment.

Other instances where we could sign somebody on but the amount they'd save would be wiped out by the fee so we just tell them to do it themselves and send them instructions, simply explaining we would charge as much as you'd save so it's not worth it, people appreciate that and off the back of it we've had recommendations of "actual" recurring chargeable work.

Older folk who have completed returns for years with previous accountants we remove from the system if their income allows it, we don't see any point in just doing work for the sake of earning a small fee where the profit is going to be negligible. Then they get to keep the cost in their pocket too.

The result is that people know we won't charge where we don't need to, which means when we do charge (we aren't especially cheap) then no one ever questions it because of the service.

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By jrussell.reesrussell
22nd Jun 2021 10:44

I really think it depends what you call free advice. Initial discussions with potential clients will always be free as until you have a signed engagement letter you cannot be charging. What about information (I know we always give an advice disclaimer) on websites, newsletters, blogs, seminars etc. I do regular webinars for no charge and always include a question and answer session - is that free advice - probably. The important thing is to charge the client appropriately for the service you provide and in this day of preagreed fees the only distinction is to make it clear when 'free advice' is not included within an overall package and ideally before you do teh work.

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By Gillian Mill
22nd Jun 2021 11:17

No we should not give free advice.

As a firm we separate advice, something which is specific to a client and their circumstances - from information, which is freely available to all but most clients don't know how to find it.

As an example I might explain the furlough rules to a client but charge them for the calculations and claims. If they choose to run their own payroll but are constantly seeking "information" I would suggest a training session and quote a fee for it.

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By graydjames
22nd Jun 2021 11:19

Duggimon sums up my view precisely.

FirstTab is everything I am not and shall never be. I am a "nice" accountant, but I would prefer the word compassionate.

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Replying to graydjames:
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By Hugo Fair
22nd Jun 2021 11:52

DoAsYouWouldBeDoneBy ... the first (and only) golden rule in my life.

If you can save someone from making a big mistake (or simply saving money) by taking 1/2 hour to listen and then advise - which usually consists of providing pointers and a framework rather than a completed 'solution' - then why wouldn't you do so?

The fact that professional knowledge/skills are involved doesn't of itself make it any different to helping an elderly person across the road or comforting a child who's lost. It's called 'looking out for each other' and is a basic facet of being a human being - recognised as particularly altruistic when the person being helped was previously a stranger to you.

To anyone who thinks the opposite ... are you really claiming that no-one has ever helped you? What goes around, comes around!

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SMH
By ShakingMyHead
22nd Jun 2021 11:55

I think (in life) it's important to pay it forward. In my time people have helped me, and as a result, I try and pay it back by helping those who I can HOWEVER ... there is a limit to freeness... I exchanged various emails with one person last week (he's been on the radar about a month) and the final straw was the screenshots, an essay of an email and 'how do I fix XYZ' - I answered the simpler question about accounting for a commission payment that hadn't physically hit the bank, but the one with the 'why isn't the credit card account reconciling... can you have a look' - I thought no, I can't be bothered. You're not paying me for this. 15 months of statements... it could be anything... By the time I wrap my head around your issue that's an hour or 2 of my life gone, never to be seen again - so I replied to his email: 'It can be done, but it'll be chargeable. It'll take a couple of hours.' Not heard back. Good. I feel I've been helpful enough for him to know I've been helpful. But not a mug, as no, I don't have 5 minutes for you to 'pick my brain' for the 10th time. Some people are actually shameless and will continue to harass you and not even think about throwing a little change in your direction so that you can at least pay the internet bill this month.

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By North East Accountant
22nd Jun 2021 12:31

Don't forget even if it's free you can be held to owe a duty of care.

https://www.lawgazette.co.uk/news/cautionary-tale-on-free-advice-from-so...

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Replying to North East Accountant:
Stepurhan
By stepurhan
22nd Jun 2021 12:39

An interesting cautionary tale, but probably not a great concern.

The person in the story did the equivalent of preparing a tax return and submitting it for free. This is more than just answering a few simple questions to point someone in the right direction.

When I do give free "advice" I tend to stick to more general terms. Either simple facts (how much is the personal allowance) or why using a company MIGHT be beneficial. I don't give bespoke advice to anyone without a formal contract gets it covered by my PI. I am sure most accountants that give free "advice" do the same.

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By johnjenkins
22nd Jun 2021 13:00

If you're taking on a new client then you will automatically giving them advice on a range of subjects. The more you interact with the client, the more likely they are to stay with you.
I think it's a matter of, are you really an Accountant or just a number cruncher that charges for anything else?

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By Duggimon
23rd Jun 2021 10:35

FWIW, as the question is worded I don't know that I would answer yes. The initial post from FirstTab that I responded to was asking us as accountants to stop giving free advice. My stance was and is that I will carry on doing so if I like, for the reasons I gave in the article, however it wasn't that others should do so as well.

You can all do what you like with your knowledge and experience! I don't think there's any "should" about it, you're not beholden to anyone, give out free advice if you like, or charge for everything if you like, I only offer my opinions and my complete rejection of the idea that someone else can tell me not to give out advice for free any time I like.

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Replying to Duggimon:
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By carnmores
23rd Jun 2021 12:06

Exactly. I agree with your approach and completely disagree with Firsttab

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By ianthetaxman
23rd Jun 2021 13:01

Each to their own I would say.

As others have identified, we probably all provide some free information to clients, either in the initial conversations to get them signed up as a new client, or on a day to day basis for existing ones.

I agree you can usually tell quite quickly whether someone is fishing for free advice, different to free information.

Some aspects of what we do take longer to discuss and inform, even in the round, before embarking on chargeable work. For this reason, where it's clear there is a likelihood of some good solid work coming out of a query, I would generally accept that some of my time will not be chargeable initially. How much depends on the circumstances, as I'm sure we all have experienced.

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By Mr J Andrews
24th Jun 2021 10:04

I certainly wouldn't charge for giving quick advice on a subject I'm totally au fait with .
I'm not so sure I would charge for time spent on researching a new or vague topic I'm asked about - but grateful for the learning experience.
Whilst I would generally agree with the first two debaters, if the payment of a bill was a crucial factor on whether to charge or not , then it's an obvious choice.
If it has come to the stage where the family life is neglected or disrupted for over a year, then perhaps time to call it a day.
It appears to be all about affordability and common sense.

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By David Gordon FCCA
24th Jun 2021 12:17

WE have always given "Free advice"
It is similar to Buy-one-get-one-free. The extra is bit in the tin is not "Free"it is just that a vendor calculates that the cost thereof will be recovered by sales engendered.

The trick is in calculating the advice time available for obtaining advantage and maintaining the practice.
With
The necessary self-discipline for sticking to your calculation.
I score 4/10!!

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