The Trust Paradox – Trusted Advisor Status Hurts Accountants

By Posted in - Public Blog on July 21st, 2014 2 Comments

The Trust Paradox: Trusted Advisor status hurts accountants
Accountants are society’s “trusted advisors”. Each year international surveys from the likes of CCH and Sage Omnibus confirm the public’s perception of accountants as someone they can trust for honest, independent, and informed advice. And many people turn to their accountant for financial advice ahead of their banker, financial planner, lawyer/solicitor, family or friends.

Accountants wear their trusted advisor status with deserved pride. But are they resting on their laurels? Is that status little more than a security blanket that both warms and comforts them? And how meaningful is that status?

In their accounting profession benchmarking surveys, Business Fitness and Spotlight Reporting found that accountants actually provide very little proactive advice. And those who do provide proactive advice, often find it difficult to monetise their non-compliance, non-tax-related advice.

So it’s fair to ask, “What’s the value in being trusted as an advisor if you don’t often advise?” It’s like being a naturally gifted athlete who never trains or competes. Unrealised talent.

From our perspective, having worked with accounting and business advisory firms around the world, trust is a significantly under-utilised asset for the accounting profession.

What a wasted opportunity for accountants and their clients.

We all need to ask, “Why is this happening?” And a big part of the answer is a reliance by accountants on that prized Trusted Advisor status.

There is no doubt that trust is an important part of being advisor. But it’s not enough. In fact, from a commercial perspective it achieves very little for accountants.

Why? Because as we know from sales and business development methodology, people buy from those they know, like and trust

(By the way, if the word ‘sales’ makes you feel uncomfortable, substitute it with ‘the psychology of influence’. And keep an eye out for a blog post on The Skill Paradox, which talks about accountants’ perceived stigma about ‘selling’ and why it may be costing them more than they realise.)

If a client doesn’t believe they really know their accountant, they won’t confide in them. They won’t share their fears and anxieties. They’ll avoid asking the dumb questions’ and revealing their vulnerabilities about issues in their business and financial affairs.

And it’s these types of conversations that uncover problems the advisor can help solve.

Likewise, if a client knows and trusts their accountant but doesn’t like them, they’ll send their advisory business to a business coach or management consultant.

And the accountant misses out.

So what’s the solution?

Communication. Frequent, authentic, influential communication.

What do I mean by this? Let’s start with ‘knowing’…

Would you really think you know someone you only see once a year? I doubt it. It’s more of an acquaintanceship than a relationship. And yet it’s exactly the superficial relationship most accountants have with their clients courtesy of the annual Year End meeting, which is often very transactional and procedural.

I once heard a business owner say that during the meeting with his accountant he felt like he was “sitting in front of a human checklist”.

He also added (coarse language warning), “And I can tell he doesn’t give a shit about me as a person”.

Was that actually the case? Did the accountant actually care about the client as a person? Or was he just another ‘job’ to get done?

Who knows? But the truth is, it doesn’t matter. All that matters is the client’s perception.

There’s no human connection in a transactional relationship like this. Sure, the client trusts the accountant will be honest and ethical. With the profession having such a strong reputation, this level of trust is a given.

But if they don’t believe they know their advisors as a person there won’t be any advisor/client intimacy, which means no sharing of information at a deeper, more personal level.

There’s a wise adage: “People are silently begging to be led”. People want leadership. They’ll follow leaders. But they won’t ask for leadership. They’re too proud, too afraid, or too busy. Instead they’ll wait until they see it and then follow.

That’s why the belief many accountants have that, “If a client wants something extra, they’ll ask for it,” is so misguided. And costly.

Clients won’t ask for it. Well, not very often. And not without a trigger.

We’ve surveyed hundreds of clients of accounting firms. And many are blissfully unaware of the full range of expertise their accountant has when it comes to future-focused advice such as management accounting, forecasting and CFO-level expertise.

Clients don’t know about these services, so they can’t buy them.

And because they don’t know their accountant, they won’t buy from them.

For accountants to change this scenario, they need to provide:

  • FREQUENT communication.
    How many times (and in how many ways) do you communicate with your clients each year? Which of these do you (or could you) do?:

    • 2 to 3 face-to-face meetings per year
    • multiple workshops and webinars throughout the year
    • regular ‘thought leadership’ articles on the firm’s blog. (Yes, all firms should have a blog, and add articles to it at least monthly)
    • eNewsletters (at least monthly)
    • videos and screencasts posted online and embedded within blog posts
    • consistently using appropriate social media channels
    • social and networking functions.

    Perhaps it’s time for you and your team to get skilled up in these new ways of marketing such as blogging and social media?

  • AUTHENTIC communication.
    This simply means, “be real”. Don’t try to sound corporate and overly serious. Avoid the ‘brochurespeak’ writing style that sounds like it has come straight out of an ad agency or PR department. Your communication—whether it’s articles on your website, content in your eNewsletter, videos, screencasts, webinars or podcasts—should sound like you. Write as you speak. Ditch the pretence. Don’t be a slave to out-dated grammatical rules you learned decades ago from well-meaning English teachers. Relax. Speak your mind. Don’t try to be all things to all people. And don’t fence-sit.One easy way to test how authentic your communications sound is to read them aloud to someone else, and see whether it sounds conversational, or like
    brochurespeak!
  • INFLUENTIAL communication.
    You can communicate frequently and authentically and still not motivate clients to take action.The last vital link is the ability to influence, which is part art, part science. Authors such as Robert Cialdini, Ph.D. have deconstructed the elements of influence. It’s a fascinating area of psychology because, in essence, it explains why we humans behave the way we do. Why we say Yes. Why we say No. Why we tend to obey authority. What makes us like someone. Why we’re motivated by scarcity. The effect contrast has on us. Why reciprocity, commitment and consistency underpin society.And why a client will say Yes or No to a proposed engagement an accountant is recommending.

    (Our Elements of Influence online video training program explains 10 principles of influence as they apply to accountants and advisors.)

If you communicate frequently and authentically, your clients will feel like they know you. But whether or not they like you depends on your ability to build rapport, listen, empathise, find common ground and common values, park your ego, and show that you’re putting your client first.

These are the ‘soft skills’ —dare we say the professional selling skills—that separate True Advisors whose clients know, like and trust them from the also-ran Trusted Advisors who rarely advise outside of basic tax and compliance.

If you want to start on a more fulfilling journey as an advisor to your clients, you need to stop resting on your laurels and throw off the Trusted Advisor security blanket (and the complacency that goes with it).Once you start broadening your definition of the skills needed to be a True Advisor, you’ll transform the way you lead and guide your clients and take it to a whole new level.

End Note: This blog post will form the basis of a chapter in the upcoming book, The Practice Paradox – Reinventing The Accounting Profession by Michael ‘MC’ Carter, founder of PARADOX.
We’d love your feedback on this chapter. Enter a Comment below. (Tip: Commenting on blogs is good for your website’s own SEO and Google ranking, in case you needed an extra nudge!) We’ll reply to all Comments.

  • Paul Dunn says:

    Excellent and pretty deep piece, Michael.

    And it occurs to me we all need to get better at examining (and acting on) the many paradoxes that exist within firms.

    You really nailed it with the BIG one — the whole thing around ‘Trusted Advisor’ — TRUE Advisor is the way forward.

    What’s stunning is that Institutions (like for example the AICPA in the US) cling to the ‘Trusted Advisor’ branding. The challenge is when you see the way some of their members do what they do, Trusted Advisor is not just a Paradox, it’s a myth.

    And I think if many firms in Australia genuinely asked themselves the question, “Can we seriously call ourselves the TRUE advisors?’ we might see some major thrust forward.

    Well done on leading the charge, Michael.

    • Thanks PD! I appreciate your feedback on our re-frame around ‘Trusted Advisor’. It’s become a cliché like ‘be proactive’. From a change management perspective, what does that even *look* like? ‘Trust’ is an attribute, not an action. “Hey accountant, what are you doing over there?” “Me, er, oh, I’m in the middle of being trusted. I’ll be with you in a moment.” And ‘proactive’ is an adjective, not a verb. “Be proactive,” is not specific advice to accountants. But it continues to be trotted out by many. It is not actionable advice.

      ‘Trusted Advisor’ and ‘be proactive’ are now both motherhood statements that accountants continue to cling to.

      After witnessing a whole lot of ‘trust’ and not a whole lot of ‘advice’ (future-focused, proactive advice) happening in the accounting profession, I decided it’s time that a more useful, brain-rewiring phrase be used, hence the coining of ‘True Advisor’. (I’d be interested in your thoughts on the True Advisor eBook too, when you’re after some bedtime/in-flight reading) As I explain in the eBook, to truly advise involves measurable, visible actions (or ‘Vital Behaviours’ as Grenny, Patterson et al explain so brilliantly in one of our change management ‘how to’ bibles here at PARADOX, “Influencer: The New Science of Leading Change”).

      That’s why we coined the term ‘Clientshare’ as one of the best measures of ‘how proactive’ an accounting firm is. It’s specific. Measurable. Not a warm and fuzzy platitude. It’s a lag indicator though. It’s a measure of how many services per client a firm is delivering. It can be measured across a firm, per Partner, per client manager, per client group, and measured in current and target/potential terms. It’s a massive focuser for a firm. (But do “practice management” systems measure this? No. They don’t. These tools are focused on measuring 6 or 10 minute time increments and somehow valuing these abstractions into WIP and invoices. Yet another paradox I’ll write a future post about.)

      One of the important up-stream lead indicators on whether a firm is being a True Advisor, is the number of future-focused client meetings conducted. This year. This month. This week. This is 100% measurable.

      Do 99% of accounting firms measure either of these things though?

      Nope. But thankfully PARADOX Member Firms do. They know that displaying a logo on their website saying “we’re a proactive firm” is about as useful as the inactive, unfit, over-eater lying on the sofa in their Nike shirt and runners. Wearing (and paying for!) ‘a badge’, doesn’t make a difference. Not to the firm. Not to the clients of the firm. It’s all so much, well, er, you know what I mean.

      I 100% agree that Trusted Advisor is a myth for most, especially the ‘advisor’ part of that phrase. Basing branding around that is about as smart as basing branding around accountants being good with numbers! (“Gee, really? That’s a relief. Glad you clarified that ‘numerical competence’ issue for me, Mr/Mrs Professional Body.” I address that folly in the earlier Numbers Paradox post.)

      Your ringing endorsement that ‘TRUE Advisor is the way forward’ means much to me. Thanks PD.

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