I did a job for an accounting/financial planning group recently.

It didn’t go as well as I’d hoped.

They were seeking advice and direction for their combined financial planning and accounting operation. We didn’t get far, because two of the three partners believed the financial planning proposition was all about investments and the accounting proposition was all about tax.

They had more than 4000 names on their client lists and were wondering why their professional lives were intruding more and more into their personal lives and their younger professionals weren’t stepping up for partnership. Yes they could relate to some of the issues highlighted at the start of the last post (‘Why are clients paying your fees?’) but they weren’t linking those issues to the process they used in their annual client meetings or to the methodology they use to present their fees.

They preferred the old-world ‘fees for service’ method for investments and hourly rates for accounting. Great.

If as advisers (accounting or financial planning) we believe the complexity the client wants us to solve or manage is a tax return or an investment recommendation or a property purchase, then we had better become exceptional experts with significant charge-out rates and significant waiting lists of clients pretty quickly.

Otherwise we are destined for a future treadmill of being paid low rates for increasing levels of work as the ‘standard’ investment recommendations and tax returns are inevitably commoditised – just like travel agents, CD stores, retail stores and the newspaper industry.

These guys were getting buried under tax returns and investment reviews, hoping that a miracle would occur sometime soon to give them the lifestyle they deserved for all their hard work.

Unless we learn to price, pitch, engage, promote and specialise our financial advice services (regardless of whether we view ourselves as a risk firm, an accounting firm, an investment firm or stockbroking firm) to better assist our clients to manage their ongoing financial behaviours, options, and challenges, we won’t earn an ongoing premium for our great advice.

Of course, we have to understand (and refer) or possess the subject matter expertise required. Of course, the market isn’t walking in our doors asking us to ‘take control of my life financially because I’ve tried and failed’.

Very few people willingly take themselves off to alcoholics anonymous admitting to themselves (and those close to them) that their own behaviours might be making a significant contribution to some of their biggest challenges.

Of course, it’s difficult to reinvent ourselves for existing clients. Once we’re well established as their ‘risk’ or ‘tax’ or ‘investment’ specialist, attempts to rebrand ourselves as ‘broad financial experts’ pursuing broader longer-term outcomes is hard. Best to start with new clients, new opportunities, and migrate the confidence earned from those experiences to existing more established relationships, if at all.

If you haven’t read Simon Sinek’s “Start With Why” (or at least seen his YouTube clip at TED), have a look. He does a great job explaining the importance of first and foremost understanding WHY the client will pay your fees, i.e. the attainment of their outcomes. Once understood then it’s your job to ensure everything you do confirms the client’s belief that you’re always acting, first and foremost, to best achieve their outcomes.

Then, the need for the self-managed super fund, the investment property, the tax structure or whatever is of value in the context of their broader outcomes, not the short-term one-off events or transactions in their lives.

These are great times to be building advice firms that earn great profits every year from retainer- paying clients who prize the relationship with their advisers because of WHY they have engaged, NOT just because of WHAT they do.

Image courtesy of renjith krishnan / FreeDigitalPhotos.net

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