Last week we asked our Advisor community who they believe to be the owner’s “Most Trusted Advisor”. Here are the results:
9% said Attorney
65% said CPA
16% said Financial Advisor
9% said Business Consultant
EPI Vice President, Scott Snider, provides a deeper look into this question:
Our EPI State of Owner Readiness Research (SOOR) survey dove into understanding the owner’s advisory team and who they lean on for advice as they operate and grow their companies. Nearly 40% of business owners indicated that their CPA was their most trusted advisor.
If you are a CPA, this is critical information. Why? Because it is likely that when the owner begins to think about their exit, gets a unsolicited offer to sell, or falls to tragedy through something like stress on the business or partner disagreement, they will turn to you for that exit planning advice. Are you ready?
All four of these selections make up what I would consider to be the four most trusted advisors to the owner and the core exit strategy team. The one advisor who time and time again is left out of the team is the owner’s personal financial advisor. According to SOOR, only 5% of owners indicated the financial advisor was their most trusted advisor. What a shame. We tend to focus on the business. Naturally perhaps because that is where most of the value is, but the value is serving a personal purpose or goal – something bigger to us as owners than just the current business. That bigger thing is, of course, our future.
The financial advisor will lead with a Wealth Gap discussion and calculation. The Wealth Gap identifies how for the owner is away from their personal wealth goal. The Wealth Gap conversation allows us to begin to understand the owner’s goals outside of the business. Once we know those, we know how much cash they need and how the business fits into their overall financial plan. After this initial Wealth Gap conversation, the Financial Advisor loops in the CPA and Business Consultant to identify the Profit Gap and Value Gap. At the end of the day, a successful exit strategy team consists of all four of this core advisors.
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