Advisory Engagements
Advisory Engagements

Create your advisory practice: It’s the relationship that matters

Read the Article

Congratulations! You have now made the decision to boost your advisory services practice. 

While any tax advisor can review a client’s books and spit out a return, the ones who are doing only this are losing out on new business, continuous revenue streams, referral opportunities, and much more. 

Advisory services are not for the tax pro who wants to hang up a “Gone Fishing” sign on April 15. Instead, advisory services is for more engaged professionals who want to help their clients grow their businesses and provide opportunities beyond a traditional scope of services.

Like most things in life, you must fight your way out of survival mode, first, before you can get attack and conquer. That’s how I see compliance and advisory: reactive and proactive.

Phase 1 – Compliance (reactive): Here, we look back. When was the last return filed, and are the books reconciled? What pressing items and fires need to be put out immediately?

We also find low-hanging fruit and potential advisory services to talk about with the client, and while a lot of discussion is educational, you aren’t pitching them advisory. You are merely suggesting things they may not know.

Phase 2 – Advisory (proactive): We fought to get out of survival mode and can now proceed with the fun part: advisory.

By doing great advisory, you will get more referrals than just doing great compliance work. For example, many clients did not know much about the Employee Retention Credit. From my conversations with other practitioners, firms that helped their clients with this got them money back that they didn’t even know was possible.

Creating a transactional vs. relational practice

If all you’re interested in is a transactional relationship, then advisory is probably not for you. It’s the relationship that matters.

One of the best pieces of advice I ever received when I was in the sports coaching world was to ask yourself this question: Do you care about your players outside of the sport?

Let’s say I coach a tennis player. Do I care about that person just becoming a better tennis player, or do I want them to become a better person and a better version of themselves? Ironically, just working on bettering themselves will make them a better tennis player.

If you are coming from this place, then you will naturally communicate this with prospects when you meet them, and pretty soon you’ll convert these prospects into clients. It’s that simple.

Listening will get you advisory clients

Now that we’re resuming in-person meetings, take your clients out to lunch just to talk with them, and listen to them to see how they are doing. The compliance and transactional tax person will never do this.

Clients will tell you their challenges and you will be there to provide solutions. Do you genuinely care about your clients? Do you know when their birthdays are? Did their daughter just get married?  

Obviously, these all have tax ramifications, but it’s all about the place it is coming from. If you genuinely are a support system for the person, listen to them throughout the year, and learn more about them as people, the transfer of trust will be there.

Build your advisory team

If you don’t have talent in house, get the best of the best: bookkeepers, payroll specialists, financial advisors, lawyers, and other professionals. The good thing about advisory and tax is that you can quickly find out who is legitimate and who is not. Then, you can share your sphere of influence with your clients.

The advisory team is not fighting with each other to be a mutually exclusive hand-off and competition for the client’s wallet, but rather a true team that helps the client build their business.

One of the themes I have been discussing recently is the concept of the family office. Most may think you need to have high-net-worth clients to niche in this area. However, what people are finding out now is that the advisory team can and should be modeled for the small business owner – and there is no better person to be the quarterback of this advisory team than the EA, CPA, or accountant who excels in an advisory role.

What role do you want to play, and what kind of practice do you want to have? The “client for life” relationships make your tax practice more meaningful in the long run.

One response to “Create your advisory practice: It’s the relationship that matters”

  1. Excellent presentation, especially highlighting the difference between a transactional and a relationship practice. The relationship in many ways is analogous to a coaching relationship.