As an accountant, you have noticed that compliance work, such as bookkeeping and tax preparation, is becoming increasingly automated and commoditized. This is driven by the increasing availability of low-cost global solutions and technology advancements. AI, like chat-GPT, recently prepared a tax return! In either regard, clients are looking for more than just basic compliance work. They want a strategic partner, that trusted advisor, who can help them plan for their financial future, and that's where advisory services come in. We all know this but aren't sure where to start. I'm here to walk you through the steps and provide my own experience along the way.
The shift from compliance work to advisory services requires a shift in mindset and approach. Rather than simply recording financial transactions, an advisor helps clients understand the impact of financial decisions on their overall strategic outlook - which is not only highly valuable but also extremely attractive work.
"I realized I was giving away tax advice for free and by working with a coach I was able to recognize my value. I needed to flip the script, and provide a proposal to clients once I identified a savings opportunity, versus telling them what to do and expecting any kind of successful implementation."
The first step in this transformation is to identify your ideal client base. Simon Sinek was partially right to Start With The Why, but the most important question at this point is actually: Who do you want to work with? What industries or demographics are you most interested in serving? By defining your niche, you can focus your efforts on attracting and serving the clients who are most aligned with your expertise, passions, and purpose.
"My niche became high-net wealth entrepreneurs. They were passionate, and successful and knew the value of having a tax expert by their side. I always enjoyed absorbing their insights, and they were respectful of mine. I realized that we could standardize entity structuring around family offices to be very beneficial for my client base, alongside a half a dozen or so other strategies that had a big impact."
Once you've identified your ideal client base, the next step is to develop a deep understanding of their unique financial needs and challenges, thereby determining your value proposition. This involves staying up-to-date on the latest laws and regulations, as well as keeping a pulse on industry trends and best practices. As an advisor, your role is to help clients navigate complex financial decisions, reduce risks, and plan for long-term financial success.
"As a tax advisor, I need to be able to identify potential strategies based on events going on in my clients' lives. I scoured the internet, associations and training opportunities to perfect my knowledge of tax planning for high-net wealth clientele, eventually creating my own tax planning CPE for others."
Once you've determined your ideal client and what value you bring to the table, you can develop a new pricing model. Rather than billing by the hour or project, advisors can bill significantly more upfront with value pricing. For tax advisors, The ROI Method(tm) of tax planning was developed to easily visualize tax savings and the Return on Investment you can provide to a client, without spending hours upon hours doing sleazy sales. Your time or effort no longer matters, but the knowledge and individualized expertise are worth a premium.
"I created packages for compliance and planning at my firm, only taking on clients that I could "start with tax planning" and identifying a 200%+ ROI. Because I was consistently finding tens of thousands of dollars in savings, I was able to charge three to five times as much as my hourly rate provided."
Finally, to make this transformation successful, you need to communicate your new service offerings and expertise to your target audience. This involves crafting a compelling marketing message that speaks directly to the needs and desires of your ideal clients. By showcasing your expertise, experience, and value, you can position yourself as a strategic partner that clients can't afford to be without.
"These are the steps I stumbled through myself back in 2016 in which I now have standardized training and instruction for others to do the same much quicker and efficiently. I made a list of all of my clients, top to bottom of who I enjoyed working with and could help the most. Then one by one, I looked over their last filed tax return for opportunities. I would email them with a few questions if needed before presenting them with an ROI proposal using a SaaS platform."
Advisory work is exciting and cutting-edge compared to the mundane compliance work that is becoming increasingly automated. By shifting your mindset and approach, identifying your ideal client base, developing a deep understanding of their unique financial needs and challenges, shifting to a value-based fee model, and effectively communicating your expertise, you can build a thriving advisory practice that helps clients, and you, achieve unlimited financial goals. I challenge you to walk through these steps with one existing or potential client in the next 30 days, to gain confidence to continue converting your firm to advisory services this year.