Welcome to the first in this new video series where we talk you through the 10 Big Advisory Questions.
Join Micheal as he answers Question 1: Why does advisory matter?
The below is a transcript of Question 1 of the 10 Big Advisory Questions Video Series – Why Does Advisory Matter?
It seems that the profession has changed more in the past 18 months than in the previous five to 10 years and that the rate of change is unlikely to slow at any stage in the future. The role of the accountant is evolving rapidly.
What clients demand today is radically different than it was 10 years ago.
Many accountants I talk to feel like they’re sprinting to stand still, struggling to keep up to date with all the technological and regulatory changes.
And amongst all, this possibly one of the most important and fundamental changes is continuing to build rapidly in the background.
That’s the changing nature of the relationship between accountants and our clients as they move from number cruncher to business advisor, from compiler of financial statements to strategic coach, from box ticker to business growth guide.
Now, this certainly isn’t something that is going to happen all of a sudden, however, the trend is clear. The profession now widely acknowledges the need to get started with advisory services for clients and prospects.
And of course that’s in parallel with hyper-efficient digitally-based compliance services, but many questions remain unanswered and in some cases not even asked.
My name is Micheal O’Neill and I’m delighted to welcome you to this video series where I answer the 10 Big Advisory Questions. These are the questions that I get asked by my clients in Ireland on a regular basis and also the questions that my colleagues in the UK, US, Canada, and Africa get asked.
So, let’s get started with today’s question.
Question 1, Why Does Advisory Matter?
Well, based on my experiences, building business for over 16 years that serves accountants, I believe that advisory provides the greatest opportunity for firms who really want to grow and develop and, let’s face it, compete in today’s ever competitive market.
Advisory gives you so many opportunities.
The stories that you can tell about you, your firm, and how you actually deliver your services, they just change dramatically when you bring in the advisory slant.
You know, from an accountancy firm perspective, the overall aims are always constant.
The Overall Aims of Advisory
The overall aims of developing Advisory for your firm remain fairly constant.
1. Winning Quality New Clients by True Differentiation.
When you look at it, for the large part accountancy services have been combined over the past number of years.
Essentially the majority of firms provide the exact same services in the exact same way. Even more interesting is the dynamic that the software companies are bringing into play.
Clients now think that you can pile all the numbers into a software package and it spits out the accounts. This is what has lead in large parts to the downward fee pressures that are being experienced by accountants across the world.
So, from an advisory perspective, when you can actually verbalize that you’re not just about compliance, you’re actually about helping your clients grow and develop their business, it brings a whole new dynamic and a whole level of differentiation to you and your firm which will make it far easier for you to win new clients.
Better yet take an Advisory approach to your prospecting meetings and instead of telling them to show them that you are all about helping them build successful businesses.
2. Increasing Client Spend
This seems like a fairly logical one but what we have seen time and time again is firms who introduce advisory do not just benefit from the additional advisory fees but what they actually find is they generate substantially more consulting and compliance fees once they’re working on a more strategic level with their clients.
3. Nurturing Client Relationships Through Structured Engagement.
So many firms and accountants that I talk to are heavily focused on the winning new clients and that’s really how they look at growing their practice.
But one of the elements that I think is overlooked far too often is making sure you keep the clients that you want to keep.
And, the “want to keep” part is big in there because I don’t believe that you should be keeping all your clients! I think you should be keeping the ones that you specifically want to keep. Your A-grade B-grade clients, they’re the ones you want to hang on to.
By providing clients with higher level advisory services you are going to deepen the relationship with those clients and therefore it’s going to be far more much difficult for them to leave your firm into the future.
The Digital Revolution
It is unquestionable that the digital revolution is one of the key driving factors of everything that we’re talking about here. And it is a true revolution.
The demands of modern clients have changed significantly over the past 10 years.
And the fact is that now the clients know or think that the software packages can do most of what accountants do. It doesn’t make a difference what the actual truth is and level of skill, knowledge and experience that is required to do what accountants do.
But in the mind of the client, they just see there’s all these software packages that you can just feed the numbers into and you get your set of accounts back out.
It is this fact that is driving the productisation and commoditisation of accountancy services, and it’s further driving this dynamic where accountants are seeing loyalty levels reducing.
So, this demystification dynamic is driving a lot of the changes that we’re seeing.
But there’s a very simple answer, and that’s a two-pronged strategy, and there’s largely consensus about this within the profession. A strategy to future-proof your firm in a modern digital age.
The first element of the strategy is efficiency. This means becoming hyper-efficient with your traditional compliance services.
Because I for one am not one of these people who is out scaremongering about the fact the compliance services are going to disappear. They are absolutely not.
And I believe even with the advancements in artificial intelligence and in the software programs, there’s still going to be elements of compliance services left long into the future.
And what we want to do is, make sure that we are hyper-efficient when performing these services, that we adopt Cloud and online technology and leverage them to drive efficiency.
The second thing is that we are growth effective, and a significant component of this will be achieved through developing advisory services to complement our hyper-efficient compliance services.
And this isn’t an either or, it’s a both, it’s a two-strong strategy to future-proof your firm.
I think this is apt because when you start taking an advisory-lead approach to help your clients grow and develop their business, it is unquestionable that there are winners all around.
Your clients are gonna win, you’re gonna win, and when you and your clients are winning the wider community is also gonna win.
But we have to be very careful that we don’t let change creep up on us. Yes, it is true, profits are holding up. And firms, accountants, are busier than ever. We see it day in and day out.
The one thing in every single survey, every conversation, every time we’re talking to an accountant, we’re busy. We’re too busy to do this, we’re too busy to do that.
And yes, it’s hard to kind of sort through everything that’s fighting for your attention, but it is important to plan for a successful future.
And the thing is this isn’t going to be something that’s just going to happen overnight.
You aren’t suddenly going to walk into your firm and it’s going to be all about advisory.
It’s about taking the little steps. It’s about planning.
It’s about having a plan in place to start introducing, to start introducing advisory to complement your compliance services.
Okay, so, that’s question one.
Why Does Advisory Matter?
And in this video series, I’m answering the 10 Big Advisory Questions.
So, you’re in here, question one, right now.
Make sure you keep an eye out for the rest of the series, we’re going to be following up with them real soon.
Thank you for listening. Talk to you soon.