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How accountants can add value

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1st Aug 2016
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You are a fiduciary representing the client’s interests. The accounting profession commands respect. One way to grow your business is through referrals, another is increasing wallet share or the fees clients pay for advice. 

We often pigeonhole people, considering them specialists in a narrowly described field. One day, clients develop problems yet don’t know where to turn. Because you provide advice and don’t sell product, you are uniquely positioned to help. You need to determine how you will charge for that advice.

How you can provide value

How can you help your clients? Let’s start with the obvious reasons, or why they initially hired you.

  • Tax preparation - tax minimisation is legal. Tax evasion is not. You file their taxes with the aim of minimising their tax bill. As the saying goes, “it’s not what you make, it’s what you keep”
  • Representation - suppose they get audited. You represent them before HMRC, explaining how their tax return was prepared. This has huge value

Now we move into other areas where you can provide advice:

  • Rent, lease or buy - the HBO series “Ballers” focused on US football players and financial advice: “If it drives, flies or floats, rent it.” Seriously, you can advise clients on the advantages and disadvantages of owning or leasing cars
  • Executive compensation packages - no, you haven’t become a headhunter who negotiates their client’s employment contact. You can advise a client who might be taking their first long term overseas assignment of the tax consequences and the benefits they should negotiate with their employer
  • Estate planning - your client may have earned their fortune, but the government is a silent partner when they die. There are strategies requiring advance planning that can reduce their eventual liability. You can help or refer them to experts
  • Starting a business - your client may take early retirement and choose to follow their dream. They are now self-employed. They need lots of advice. If the business succeeds they may choose to sell. That business will need a proper valuation
  • Surviving spouses - many older clients lived lives in defined roles. One partner made the money, the other ran the household. The aging breadwinner is concerned how their surviving spouse will cope if they die first. You can provide advice on structuring accounts so bills get paid and their anxiety is reduced
  • Lending alternatives - banks are in the business of lending money, but what are the best alternatives for your client if they are building a house or starting that business? Are they carrying balances on their credit cards that could be paid down with cash in savings? Could they shop around for a lower credit card rate?
  • Charitable giving - it may be in your client’s interest to reduce the size of their taxable estate by making charitable gifts during their lifetime. These might be structured to provide income in the present
  • Protect the idiot - okay, this can’t be sold as a service, but you can protect clients from themselves. A chance remark overheard in a bar about an upcoming earnings announcement might seem like a golden opportunity to buy some stock options. The regulators take the view they are trading on inside information. However, the client needs to give you the opportunity to warn them off
  • Planning for retirement - the average life expectancy in the UK is 81.2 years. Wealthier people often live even longer because of better exercise, diet and healthcare. Will your client outlive their assets? How early should they start planning for retirement? Younger clients may need some convincing
  • When heirs are irresponsible - “if you don’t travel first class, your heirs will.” It’s been said the first generation makes the money, the second struggles to keep it and the third generation loses it. Suppose the next generation is set to live the easy life when the client is gone? The client may want to keep the principal at arm’s length. You can help them get that advice
  • Liquidity events - emergencies happen. It may be a new roof or sudden medical expenses. How will the client raise money quickly if necessary? You can help them plan in advance for this contingency

Several of these scenarios involve other specialties. Bankers, insurance agents and investment advisers will probably enter the picture. Each has an interest in selling their product and making money. 

You are a fiduciary. You work for the client and are paid for your advice. You can be the team captain in a relationship to serve the client. You bring lots of value to the table.

 

Bryce Sanders is president of Perceptive Business Solutions. He provides HNW client acquisition training for the financial services industry and is the author of “Captivating the Wealthy Investor”.

Replies (2)

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By Vaughan Blake1
03rd Aug 2016 12:33

Bryce, be a good chap and stick to training the financial services industry and leave us alone.

However, my phrase of the month is now "Increasing wallet share"!

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Replying to Vaughan Blake1:
bryce sanders
By Bryce Sanders
03rd Aug 2016 14:05

Vaughan, thanks for commenting. You are viewed as a fiduciary, making your client advice independent and valuable. That's something the financial services industry aspires to, but often isn't seen by clients in that respect. You have an advantage that's also an opportunity. Your additional advice would probably be welcomed by clients. That's why I bring these ideas up.

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