Financial Coaching Services You Can Offer Clients

August 9, 2021

Why do people hire consultants? Maybe they don’t want to reinvent the wheel. Maybe they want to avoid the trial-and-error approach. But the most important reason is that experience has value. People want to learn from an expert. And, generally speaking, people will follow advice when they have paid for it. As an accountant, you are in a position to offer clients valuable investment advice; the challenge may be getting them to pay for it.

How Can You Help Individual Clients?

Much of the advice you can offer involves financial planning. The value you bring to the table is based on your objectivity. You are a fiduciary selling a roadmap. The client chooses the car to make the journey.

Retirement planning: Few people are adequately prepared for retirement. A major objective is to enable growth in a tax-deferred environment while keeping administrative costs and fees under control. Many people who provide retirement planning services also sell insurance or investment products. Think of it like going into a car dealership to buy your roadmap.

College funding: At the basic level, it’s putting money aside to grow in a low-tax environment. There’s also the larger issue of meeting the total cost through loans, grants, scholarships and other incentives. It’s also worth considering whether a college education is the best choice for the client’s child. College funding is a major expense that clients often overlook.

Caring for aging parents: Many clients find themselves “sandwiched” between raising their children and caring for aging relatives. Both are a drain on finances. Solutions can include downsizing, moving aging relatives into retirement communities and paying for adequate health care. Accountants can be particularly helpful in this area.

Divorce or death of a spouse: Either situation can put your client in a vulnerable state, surrounded by people wanting to make money at their expense. They are at risk of making bad decisions and relying on the wrong person for advice. As their accountant, you are their paid fiduciary and can give them objective advice.

Budgeting: Many people need help with figuring out how to budget. Some of them even get into debt when they don’t save for the future and have no emergency fund. As their accountant, you understand their personal finances and have firsthand knowledge of their checking account and brokerage records. You can help them develop a budget, pay down their debt and monitor their spending.

Long-term care: Unfortunately, most people will require long-term care near the end of their lives. Many people mistakenly believe that Medicare will pay for long-term nursing home care while allowing them to keep their substantial assets intact. However, Medicare pays for long-term care only if the person has nearly exhausted their own assets first. Clients need a plan for when they can no longer care for themselves. While some clients have children who will either take them into their homes or pay for their nursing home expenses, they still need a Plan B.

How Can You Help Your Business Clients?

Business owners often have most of their wealth tied up in their business. While some are successful, many are struggling to remain afloat. These clients often need help, but don’t know where to turn. While a banker can be a helpful resource, when a client gets into financial difficulty, they might not want to share certain information with their chief lender. Here are some ways you can help.

Lowering overhead costs: You can look at where their money is going and what they are paying service providers and help them renegotiate better deals or switch to other providers. If their business owns property, they might be able to challenge the tax assessment. If they rent their premises, you might help them when they renegotiate the lease or help them find alternative space.

Improving cash flow: Every business has slow payers. Some have “no payers.” You can help them stay on top of aged receivables and chase after them. You can help them redesign their payment terms to encourage early payments and penalize late payments.

Selling the business: You can help them prepare the business for sale. It’s like a coach preparing an athlete for a major competition. The business needs to be in optimal physical and financial shape. Keep in mind that this often has a long lead time.

Buying another business: Your client might be considering expansion. One strategy is to buy an existing business. The most valuable asset is often the client base that provides the revenue stream. You can help your client get an objective valuation of the existing business and design a purchase agreement that protects your client.

Debt reduction and the cost to carry debt: Many businesses owe money. They maintain a line of credit to smooth out uneven revenue cycles. Small businesses can find themselves carrying credit card balances at high interest rates. You can advise them on paying down debt when things are going well and consolidating outstanding debt at lower interest rates.

Buying out partners: Sometimes partners die and their heirs inherit their share of the business. Often, the owner wants to buy them out, and the family would prefer cash to equity. You can help business owners plan ahead with strategies like purchasing key person insurance, which pays off when the insured dies.

How Can You Get Them to Pay for Advice?

The first step is to establish yourself as the expert. When advising individuals, having the certified financial planner (CFP) designation is a good strategy. The accounting profession has several other relevant professional certifications.

It also makes sense to package advice. For individuals, financial planning can easily be sold as a packaged service. There are many software programs that produce attractive reports. This is a comprehensive solution you can deliver for a specific price.

Addressing individual scenarios can be a standalone service (a good fit for businesses) or an add-on as a follow-up for the individual financial plan. Clients can be billed at a flat rate per project or be billed based on the billable time required.

In either case, you need an initial fact-finding session to learn the scope of the problem and the client’s issues. You will also need supporting paperwork. The data gathering component of the service might be free or built into the pricing of the final report, complete with prioritized action steps. You will need to develop a system for addressing each problem and a reporting format for presenting your advice.

The advantage you bring to the table is your objectivity. You can propose a solution without trying to sell a product. You are providing advice based on experience, which is invaluable.

This article originally appeared on AccoutingWEB

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