How you can be more actively involved in your clients’ estate planning.

This brief article makes the case for accountants and financial planners to be more actively involved in their clients estate planning.

Introduction

If there’s one thing that’s certain about the clients that you look after, it’s that they will all die at some stage. How prepared are they for this and more particularly, are their affairs in order?

In this brief discussion paper, I’d like to explore the responsibilities of financial advisers in this area, along with the commercial opportunities that accompany making estate planning an integral part of the services you provide.

Traditional practice

Let me start with sharing some observations about what I’ve seen as normal practice –

Accountants

• Often, it’s a case of complete abdication. For some, this is a conscious decision – “We haven’t been engaged to provide that service”. Otherwise it can be a natural consequence of an aversion to selling or simply being too busy on other issues to give it much thought.
• Some accountants bristle when challenged about not being involved in clients’ estate planning, yet when it’s all peeled back their only involvement has been to ask “Do you have a will?” at the first meeting with a new client.
• Others are wary about venturing away from the certainty of numbers and venturing into a much more personal discussion with their clients

By and large, I submit that this is simply not good enough. Accountants are failing their clients by not taking a greater interest in this area.

Financial planners

• Under their duty of care responsibilities, planners typically take a more systematic approach than accountants. This is most likely because estate planning is a section in their Statement of Advice template and consequently a compliance auditor may check to see that this aspect has been completed. Often though, the care component is cursory, simply recommending that clients seek out a lawyer to get their wills prepared, without sufficient follow up to ensure that this is actually done.
• I’ve noticed an aversion to extending consideration on to clients’ businesses – shareholder’s agreements; key person cover – and other generations, be they older or younger than the primary client.

Then for both accountants and financial planners, some are wary about getting too involved for one or more of these reasons –

• Concerns about the appetite of clients to pay for the service, over and above the legal fees which will be incurred
• Lack of a defined product to provide in this area
• Lack of systems to deliver the product cost effectively
• Lack of knowledge and/or confidence to advise clients in this area

However, a conversation along the lines of “How would your family and your business be placed tomorrow if something happened to you today?” is undoubtedly in your clients’ best interests and therefore should be pursued. Such a discussion should cover not just estate planning but insurance and what other arrangements which should be in place.

Referring to a lawyer is insufficient

I submit that it is simply inadequate to glibly refer clients off to a lawyer to get a will prepared, all care but no responsibility.

For clients of any complexity, having your client with a blank mind sitting down with a lawyer with a blank legal pad is tantamount to negligence. As their trusted financial adviser, you have knowledge which will greatly assist the lawyer in preparing not just wills but pulling all the relevant aspects of your clients’ estate planning arrangements together.

One doesn’t have to look too far to find situations where there are significant issues to be considered:

• Where assets are held in superannuation funds and other entities
• Where this is a case for a child maintenance trust, particularly post marital separation
• Asset protection measures, particularly for clients in business
• Business assets, particularly where there are arm’s length stakeholders involved
• The desire to create and leave a legacy – for family members and good causes

No matter how talented the lawyer, the final outcome will be all the better for the input from the primary financial adviser.

The minimum standard

Ideally, the firm will have had a significant interaction with each and every client about their estate planning arrangements. A signed acknowledgement by clients who choose not to use the firm’s services would be the minimum standard.

Better still, clients will perceive value in involving their financial adviser in this aspect of their affairs.

The commercial opportunity

In an era where there is increasing concern about core services becoming commoditised, estate planning provides a wonderful opportunity for advisers to provide truly remarkable assistance to their clients.

To convert this into a profitable revenue stream will however require a solid plan and great execution. It also needs a passionate True Believer in the business to ensure the initiative reaches its potential.

In truth, coming up with such a plan is not particularly difficult. I wager that most experienced practitioners could come up with something quite suitable within a couple of hours. If given sufficient priority, most other inputs to the process – knowledge, systems, technology – can readily be assembled to then provide the service.

There are however a few elements which will contribute to success in this area

• Quality, consistent marketing – to keep clients not only aware that the firm provides this service but to educate them as to why they need it.
• Good tools with which to interact with clients. Scenario planning for example is enhanced by having software which can quickly construct and adjust a client’s family tree. Information gathering can be accelerated by workbooks that clients are requested to complete before meeting with their adviser. Clients can be educated on important concepts in leveraged ways, such as film clips and/or eBooks. Defined services with pre-set prices and efficient templates help to ensure the service is undertaken with good recovery.
• Aligning with the right lawyer. If you are going to be in this field, then you need to combine forces with a switched on lawyer who specialises in estate planning. Also, work out how to extract efficiencies from your collaboration. On your files or in your head is most likely everything that the lawyer will need. How then can you provide this in a manner which will make it easiest for the necessary documents to be prepared?
• Getting the financial aspects right. This follows on from the last point. Valuable as it might be, few clients have an open cheque book for this service. If the lawyer charges at or above what the client is comfortable in paying, then no matter how great your service, you won’t get paid. For best results, refer your work to a lawyer who not only is great at estate planning but charges a competitive price.

Client loyalty will also be considerably enhanced by providing this service. Quite simply, the bonds formed with the client throughout the estate planning process will add considerably to the lifetime value of the relationship, which in turn will boost annual profits and your business’s value.

Conclusion

As your client’s primary financial adviser, there is a compelling case to take an active role in your clients’ estate planning.

Scott Charlton is a director of Slipstream Coaching.

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Phil Little

Phil Little joins Slipstream Coaching as the organisation’s business coach to high-performing financial planning firms throughout Australia.

He joins with over 30 years of experience in financial services, including managing director roles at Henry Financial Group for eight years, and Synergy Financial Services for seven years. His most recent role prior to Slipstream Coaching was Business Growth Manager for Fortnum Private Wealth.

Phil joins Slipstream Coaching at a time when the company is actively seeking to increase the financial planning side of their coaching business.

Slipstream Coaching’s Director, Scott Charlton says, “Quite simply, we couldn’t have asked for a better, more qualified person to lead the way”. Phil’s appointment supports the company’s ongoing commitment to assisting accounting and financial planning firms to achieve their full potential.

Phil has held various senior executive roles in several leading financial organisations throughout his career. Having also been a principal of a financial planning practice for almost ten years, setting up and running a licensee, and previous roles as the national recruitment manager for leading licensees, Phil has experienced all aspects of the advisory world.

He brings with him the experience to quickly assess a business situation, determine a range of appropriate initiatives and convey profound insights to practitioners. Having meaningfully interacted with hundreds of financial planning firms around Australia, Phil’s understanding of how high performing firms operate is a distinct advantage when advising clients throughout their coaching journey.

The decision for Phil to make the move to an independent coaching organisation was greatly due to being able to provide advice and assistance which is demonstratively free of any other agenda. Phil’s coaching is no longer diluted by the many and varied responsibilities inherent in the business development roles he has had whilst a licensee employee. Now, his absolute focus is on assisting clients to achieve their objectives.

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‘Partnering with Accountants’ by Scott Charlton

In this third instalment of a special three part series, guest contributor Scott Charlton provides some insights about how to enhance your relationships with accountants. These insights are an extract from Scott’s recently released book, Partnering with Accountants.

Quick summary: Involve the accountants in identifying how best to assist them in developing a more valuable business and enhanced client relationships.

In this article, we conclude the three-part system to develop accounting relationships with a process which will enable you to tailor a package of benefits that the accountant will appreciate when he/she starts working with you.

Let’s face it. There is only so much time and resource that you can devote to enhancing an accounting relationship. It’s therefore better to concentrate on doing one or two things well than adopting a scattergun approach. Equally, there’s no point in (say) going to a lot of trouble running a monthly training session for an accountant’s team when the accountant would prefer your assistance in running a client seminar.

So the third aspect of this trilogy is a checklist of areas for an accountant to indicate where his/her firm would appreciate some assistance. This checklist will enable you to concentrate on areas that each particular firm of accountants will value. Feel free to add or subtract from this list as you see fit. Naturally, you should have the resources to deliver each item.

It will certainly assist in this aspect of the conversation if you can direct it towards addressing issues that the accountant may have volunteered up to this point. For example, if the accountant is looking for business growth but is clueless with marketing, applying your experience in this area is likely to be far more valuable than (say) providing a share of your revenue.

Click here for a menu of potential ways in which you might assist accountants.

It should be noted that at any point during the conversation covered by this and the previous two articles, proceedings could be interrupted by a question about income splitting. You can virtually expect this if you are presenting to a group of accountants i.e. someone who hasn’t said much will interject right in the middle of you talking about something else. This checklist provides an excellent means of countering this question. Here’s a sample script.

Accountant: So what’s my share if I refer clients to you?

You: It’s not our policy to share our income with referrers. Instead, we look to add value in other ways. Our experience is that committing resources to your firm will ultimately be more beneficial for you and be more sustainable for us. As to what those resources could and should be, we’d value your input. This checklist [hand the document over] includes a range of suggestions. It would be very helpful if you indicated which would be of most value.

Naturally, if an accountant indicates quite a number of items would be of interest, you need to engage in a discussion about priorities. This is a great conversation to have, enabling you to set expectations that the relationship will be ongoing e.g.

You: That’s great. What I’d suggest is that we start with [X and Y]. We can introduce [Z] later on. Then at the end of the first year we can sit down to together and map out a plan for Years 2 and 3. How does that sound?

The net result should be a small list of agreed initiatives that you program into your marketing activities. In turn, this will give you the opportunity to interact with accountants in ways they will truly appreciate.

Action

• Review the checklist and amend to suit
• Ensure that the document reflects initiatives you are willing and able to provide
• Role play the process of introducing the document and discussing it with the accountant

That’s the final instalment of our three part series on fast tracking a relationship with an accountant. Now that you’ve put your best forward and got the accountant’s attention, it’s time to prepare for the inevitable test cases – a subject which is addressed elsewhere in Partnering with Accountants. Good luck with your collaborative endeavours!

To receive a free copy of Scott’s latest book, be one of the first five readers to email: scottcharlton.partnering@gmail.com, with “Partnering with Accountants” in the subject header.

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Formerly an accountant in practice, Scott Charlton is a business coach who works with both accountants and financial planners. Scott is the author of Partnering with Accountants, a guide to the ultimate referral destination.

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‘Partnering with Accountants’ by Scott Charlton

In this second instalment of a special three part series, guest contributor Scott Charlton provides some insights about how to make an accountant much more at ease in dealing with you. These insights are an extract from Scott’s recently released book, Partnering with Accountants.

Quick summary: To give accountants confidence about referring their clients to you, address their deeply held concerns.

In the previous article in this series, we looked at how to help accountants get to know more about you and your capabilities. However it is unlikely that accountants will be swayed by this alone. They want to know that you are going to be a valuable collaborative partner. This article discusses what else you will need to cover before accountants will feel comfortable in working with you.

A central theme of this part of the process is demonstrating that you understand their concerns and what you have done to address these issues.

Essentially, accountants want to know that when the going gets tough, you won’t cut and run. Remember – whilst the clients are new to you, in many instances they represent highly valuable, long standing business relationships to the accountant. Little wonder they will naturally be cautious about referring their clients to you.

The Due Diligence checklist referred to in the previous article is based around deliverables – your fee schedule, personal profile, papers you’ve written, website etc. What this doesn’t cover is your approach to business and working with clients. Hence, there is a second document, which I recommend providing to the accountant immediately after you have stepped him/her through the Due Diligence checklist.

This second document is called Our approach to working with accountants and contains a set of commitments which accountants will appreciate. These include taking responsibility for the advice you provide, keeping the accountant informed regarding clients referred and reinforcing the central role that the accountant plays in the financial life of his/her clients.

Click here to see an example set of commitments.

In a similar vein to the previous checklist, it is recommended that you alter these commitments to suit the way you want to work with the accountant and reflect the way you like to express yourself. After all, when you are sitting across the desk from an accountant, you need to own these commitments!

This particularly applies to the final point regarding your views on sharing income, a topic discussed in more detail in Chapter 9.1 of Partnering with Accountants. Suffice to say that if your choice is not to share income, then this document provides a very positive context in which you can express such a policy.

Here’s a sample script in terms of introducing this document, after the accountant has digested the Due Diligence checklist.

Accountant (looking thoughtful and putting the Due Diligence Checklist to one side): Thanks for that. I’ll have a look at it and get back to you.

(As a point to note, never leave meetings on the basis of the accountant getting back to you because they get busy doing other things.)

You: Great. I think you’ll find that quite helpful. However, I venture to say that there are still some issues that you will need to satisfy yourself about. Would I be correct in saying that you’ve had some not so great experiences with other advisers in the past?

Accountant: That’s an understatement.

You: Like you, we derive most of our income from looking after our clients over the long term. What this means is that you can be confident that we’re not going to leave you with a problem. We’ve put this together in the form of a set of commitments for any clients you refer to us. (Hand over the document.)

At this point you will go through and discuss each item. Happily, many fears and concerns that accountants will have are addressed by this set of commitments.

In due course, the accountant will verify that you actually live up to these commitments. For now though, the very fact that you have raised the issues is a strong indicator that you are capable of delivering. This is likely to be enough to warrant giving you some test cases (an issue addressed elsewhere in Partnering with Accountants) which represents a significant advance in your relationship.

Action

• Review the checklist and amend to suit as appropriate
• In particular ensure that the document reflects your views on sharing income
• Role play the process of introducing the document and discussing it with the accountant

That concludes the second of our three part series on fast tracking a relationship with an accountant. The final part of the series will help you to identify areas by which you can truly add value to the accountant. Going through this process will not actively foster more referrals, it will greatly enhance your ongoing relationship.

To receive a free copy of Scott’s latest book, be one of the first five readers to email: scottcharlton.partnering@gmail.com, with “Partnering with Accountants” in the subject header.

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Formerly an accountant in practice, Scott Charlton is a business coach who works with both accountants and financial planners. Scott is the author of Partnering with Accountants, a guide to the ultimate referral destination.

Read the first instalment here.

The post How to make an accountant comfortable about giving you referrals appeared first on AdviserVoice.

Ray Miles

Independently-owned advisory firm Fortnum Financial Group has launched a compelling business coaching and licensing offer for accountants with the firm predicting a wave of practitioners will rush to become licensed in the second half of 2015.

New Fortnum subsidiary, Fortnum Professional Strategies will provide class of product licensing and a wide range of complementary services including education, training and business coaching to help accountants understand and meet their obligations under the government’s new regulatory framework.

It will also work with accountants to boost practice productivity and growth, form referral relationships with centres of influence, and build expertise in areas like superannuation, estate planning and asset protection.

Fortnum Professional Strategies is headed by chartered accountant and business coach Scott Charlton who is also head of strategic development at Fortnum Private Wealth. Before joining Fortnum in 2010, Charlton was coaching program manager at leading Australian and New Zealand training organisation, Proactive Accountants Network.

“With the removal of the accountants’ exemption on July 1, 2016, many organisations have launched a licensing solution for accountants but licensing alone won’t ensure that accountants and their clients are better off under the new regime,” Charlton said. “In addition to licensing, we want to give accountants clarity and direction around their business model. We want to help them run more productive, efficient and profitable practices through training, coaching and interaction with their peers.”

Fortnum executive chairman Ray Miles said the recent exit of Proactive Accountants Network from the training space created an opportunity for Fortnum to help accountants impacted by the removal of the accountants’ exemption.

“At this critical juncture, there’s strong demand for licensing solutions and development programs specifically designed for accountants,” he said.

“We aren’t interested in working with accountants who want the cheapest solution. We don’t believe that the challenges facing accountants can be solved with licensing or software alone but rather we want to partner with people to implement effective programs and help grow their business.”Charlton said the majority of accountants were still unsure about whether they would apply for a full or limited Australian Financial Services licence; join an established dealer group; or partner with an advisory firm.

“Many wrongly believe they have a lot of time to figure it out but what they don’t realise is that there’s more to it than just licensing. They may need to undertake additional study so they can’t afford to leave it much longer before committing to a course of action,” he said.

In addition to tailored and flexible licensing options for accountants, Fortnum Financial Group also offers comprehensive licensing and dealer services to financial advisers through Fortnum Private Wealth.

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