Accountants as Accidental Advisors?
The following is an article straight out of our team wiki here at PARADOX. The article title–internally—is ‘Our WHY’ and it’s from me, as Founder, to new team members to explain why we do what we do for accounting and business advisory firms here at PARADOX. In it, I share the two challenges accountants face in making the shift to become true business advisors.
Accountants are a lot like Dustin Hoffman’s character in Accidental Hero. To refresh (or brief) you on that, here’s the movie trailer…
Bernie LaPlante found himself in a situation—completely accidentally—where he could be a hero. He could make a choice to save peoples’ lives, or he could just walk away.
He chose to save some lives.
I believe that the accounting profession finds itself in a similar situation to Bernie.
Many accountants are, in my view, accidental advisors. They got into the profession thinking it was about numbers, and now—especially with the automation of much of the calculation work—they realise that the accounting profession is an advisory profession.
That means it’s about people, as much as it is about numbers. As much about communication, as it is about calculation.
But many accountants didn’t know this coming in.
And many find themselves ill-equipped to make this shift.
Those who do make the shift, however, are changing lives. They really are. And their clients love them.
Accountants are society’s ‘trusted advisor’ when it comes to financials and business. Surveys each year, in multiple countries, confirm this trust of accountants. This trust combined with the financial nature of what they do puts accountants in a pivotal position in the lives of their clients.
Why do I say that?
Because often an accountant knows more about their clients’ true financial positions than many of their clients’ spouses do.
It’s a privileged position.
And with that privilege—I believe—comes a responsibility.
In fact, I think there’s a moral obligation here: A moral obligation to advise.
And by ‘advise’ I mean to advise their clients about their future, and not just continue to report on their past.
True Advisors™ change lives. They have evolved to a level that is above the Trusted Advisors. True Advisors helps clients to achieve greater financial security and peace of mind, more choices for their client’s families, more ability to contribute to society and to help others.
But… and this is a big but…
Most accountants have not yet learned how to be future-focused advisors. They are still reactive reporters, driven by their clients’ tax and accounting deadlines. They’re still on the compliance treadmill.
And even once an accountant has developed the soft skills (people skills) and technical skills they need to be an effective future-focused advisor, there’s one last hurdle for them.
They need to learn how to market and sell their advisory services.
Why is this a hurdle for them? Two reasons…
Firstly, the very nature of advisory services not being ‘compliance’ services, means the governments of this world do not require individuals to plan their financial future or to plan their business’ future. The word compliance means that people and businesses need to comply—they are forced to do certain declarations, reporting and lodgements—otherwise they are breaking the law.
So people do them. But most compliance is about income and profit reporting to satisfy the government’s need to generate taxes.
So, compliance is all retrospective. It’s just reporting of past results. As U.S. management guru W. Edwards Deming famously wrote, “Management by results [is] like driving a car by looking in rear view mirror.” It doesn’t help you get where you want to go.
So, by definition, ‘non-compliance’ services means ‘optional’ services. No-one has to use these value add services, whereas everyone must lodge their tax.
And if something is optional, it has to be sold.
This is the second reason most accountants fail to cross what I called The Value Add Chasm…
They never learn how to market and how to sell their advisory services.
Even though many accountants and advisors are able to do advisory engagements, not many can get the engagements in the first place.
So, they stay stuck on the compliance treadmill side of The Value Add Chasm where, currently, 9 out of 10 accountants sit wanting to do more value add advisory work with their clients, but are not doing much of it at all as a percentage of their revenue, and across on the other side of the chasm are the 1 in 10 firms who have successfully learned how to cross it.
And they crossed it by learning how to do this:
This is why PARADOX exists. To help accountants communicate value. And that’s what marketing and selling are:
- Marketing = the communication of value one-to-many
- Selling = the communication of value one-to-one
Why do we care so much about helping accounting firms to cross The Value Add Chasm and to become true advisors?
It’s so accountants can:
- make a meaningful positive difference in their clients’ lives,
- enjoy far more professionally and emotionally satisfying work,
- grow their firm’s revenue by doing more to help their clients (provide more services), and
- future-proof their business against the looming and inevitable automation of many aspects of compliance services.
That lights our fire.
And changes the world.
One small business at a time.