When you get a group of advisors to private business owners together, the conversation will often drift into whom the business owners trusted advisors are. The second part of this conversation is how can we get influence with this group of advisors?
In my experience private business owners don’t go to professionals for advice. In fact, they only want to use professionals after they’ve flushed out their ideas with those who are close to them. Sometimes those people are spouses or immediate family, but more often they’re peers whom they trust.
I think the reason for this is for two reasons. First, they trust their friends. There is rarely a hidden agenda and rarely posturing behind the answer to their question.
Professional advisors make their living through fees from their clients. I know this isn’t a news flash to anyone. But, private business owners know that because their writing checks for advice, sometimes (and in my opinion often) the professional advisor will tell the business owner what the advisor thinks the business owner wants to hear. This is because professional advisors have been fired for saying too much and advisors don’t want to put themselves in that situation.
If instead, the business owner goes to a friend or a peer they aren’t going to be worried about having adviser bias creep into the conversation. They are usually pretty sure the advice or opinion they hear from their friends is the truth from their friend’s point of view.
The second reason business owners go to their friends versus professionals is because of fees. Business owners are fee adverse. They don’t like to pay fees and business owners will do everything they can to not pay fees if possible. Their friends will give them advice and not charge them a fee. And, often the business owner believes the advice they get from their friends is better than the advice they get from their professional advisors.
I believe that part of the reluctance private business owners have discussing issues with advisors can be overcome by changing how we charge fees. We as advisors also have to take the risk that we might get fired and let our clients have our best and honest advice all of the time.
As always, I’m interested in hearing your thoughts on this subject. Also, please click on the button below and get my special report on The 7 Myths Of The Private Business Owner. This report deals with seven common misconceptions that I see professional advisors or employees often have about business owners.