Published: 2010 11 22 | Views: 2491

I was at a bank’s succession planning seminar recently and at the end of the presentation someone in the audience asked why he should use the bank’s services in that area when he has his own lawyer and accountant to provide him with the advice he needs.  The answer from the banker was that the bank is a catalyst for getting a succession and estate plan done, not a replacement for the work of the lawyer and the accountant.

The banker’s response made me wonder if business owners are getting the advice that they should be getting from their lawyers and accountants.  In the perfect world, bankers should not have to be catalysts for business owners to be getting help from their lawyers and accountants.  Why should the lawyers and accountants need the banker’s help in properly servicing their own clients?    

The answer is likely either that the lawyer or accountant does not have sufficient expertise in this area, or has the expertise but does not have the relationship or is perhaps not being sufficiently proactive with the client.  Whatever the case may be, it is the responsibility of the business owner to ensure that he or she is getting the proper advice.  I know that that can be much easier said than done, so in an effort to help the business owner sort this through I offer up some suggestions.  

If you are not sure if you are getting good succession or estate planning advice, you should challenge yourself to ask why that is the case.  Perhaps you are shying away from seeking the advice because you are worried that it will cost you more money than you can afford or want to spend.   Or perhaps you do not know what you stand to gain by getting that advice.    

Or you may be thinking “I can solve the problem myself”; “An outsider could never understand my business”; “An advisor will raise a lot of issues I don’t have time to bother with right now”; “I don’t want to share any information with an outsider”; “Our longtime lawyer (or accountant or banker) is a family friend and knows us best”; “I’m unsure of how relationships with professional advisors work”, etc., etc.

These may be reasonable concerns.  They may, however, be getting in the way of you doing what needs to get done.  I say this not to encourage anyone to leave their existing professional advisor, but rather to begin a dialogue with that advisor if you have a concern.  Oftentimes, the advisor will have a perfectly good answer and merely having the discussion will help you along in the right direction to achieve your desired goals.     

In their book How to Choose & Use Advisors: Getting the Best Professional Family Business Advice, Craig E. Aronoff, Ph.D. and John L. Ward, Ph.D say that a family business owner should examine relationships with an advisor who:

•    Fails to avoid conflict of interest
•    Fails to respect client confidentiality
•    Promotes dependency in a client
•    Works primarily in isolation
•    Is reluctant to deal with successors
•    Sells solutions rather than listening to problems
•    Ventures beyond his or her knowledge
•    Makes too many decisions for the client
•    Fails to foster good communication
•    Lacks empathy

On the positive side, they listed the following benchmarks of excellence in family business advisors:

•    Maintains up-to-date technical knowledge and shows strong interest in and commitment to the field
•    Communicates openly in clear, simple language, helping educate family members when appropriate
•    Seeks to know the family and business in depth
•    Understands how families work and how the family and the business relate to each other
•    Gives advice and counsel that suit both the family and the business
•    Initiates periodic meetings with the client for update and review
•    Is resourceful on clients’ behalf, spotting opportunities and sharing information and contacts
•    Shows empathy, patience and trustworthiness
•    Is willing to work with successor generations
•    Raises questions about the future
•    Promotes collaboration among advisors
•    Gives honest advice, even when it may jeopardize the client relationship

From time to time, it is important to pause and ask yourself whether you are getting the advice you need.  For family business owners, there may be much at stake for the business and/or the family particularly when it is time to do succession or estate planning.  


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