Shatter the ‘advisory’ myth

It is the perceived wisdom of many practitioners that clients are not amenable to paying for advisory services and just want their accounts and tax returns sorting; with payroll, VAT and general bookkeeping thrown into the mix.

Which is why the majority of fee income for these practices relies almost solely on compliance services.

Read on to see why this point of view encourages a dangerous mind-set and is a glass ceiling that adventurous practices are shattering with great effect.

Why is reliance on compliance services a problem?

There are endless tales of firms that have lost clients to outfits that specialise in compliance activity and who are prepared to work for much lower rates. These are practices that lean on IT to process the numbers and the name of the game is to convert records into accounts and tax returns as quickly as possible. To sustain this business model, the minimum of client contact is necessary to bring the job in at a reasonable cost.

Compliance demands – to produce and file accounts and tax returns – is a grudge item for most business owners. In which case they are going to look for the cheapest price, in place of the best service when choosing someone to undertake the necessary work.

To break through this glass ceiling practitioners should set out to distinguish their services from these factory-farm compliance firms.

One step at a time

The introduction of advisory services will take time to introduce especially for firms that have built their practices on predominantly compliance services.

A first step might be to focus on creating advisory-led services. For example, consider a small limited company client who has always had their annual accounts, corporation tax computations and directors tax returns completed. A standard high dividend low salary approach has been in place for a number of years.

What if when you prepared their next accounts you used a simple, industry standard method to value the business? With the correct tool this could be done in a matter of minutes. Instead of posting/emailing accounts for approval, pick up the phone, advise client that you have added a business valuation this year and use the opportunity to set the seeds for business exit planning, estate planning or wealth management services.

Conversation is key

Advice is a big word when it is linked to real-world problems. If you can talk to your clients and get them to reveal their problems you can then offer solutions.

Advice is a solution in action.

And hey-presto, if your clients start to see that you can not only keep HMRC and Companies House off their back, but you can also help them start and grow a business, develop business exit strategies, help them with personal, business and other tax planning opportunities, then they can associate those service with real benefits; they can appreciate the value of your advice and be willing to pay for it.

Where to start?

Bob Edwards and his team at Landmark have converted his long experience in the profession into three service options that you can use to start your own transition from a compliance to an advisory-led compliance practice. There are no downsides to reaching up and breaking through this glass ceiling. Firms that have the tenacity to do this will reap the rewards in coming years.

Take a look at the range of services LandmarkPD offers practitioners here.

Like a call with Bob Edwards to discuss your options?

Book a slot in Bob’s diary here – as an incentive, and following your call, Bob will send you a copy of the business valuation spreadsheet mentioned above.

Bob Edwards

Bob has been working with practices across the UK offering novel ways to improve cross-sales and increase new client acquisitions. He is also interested in "step changes" in legislation that offer challenges, and therefore opportunities, for practitioners to provide new recurring and one-off support services to clients.

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