As a business owner, one of the most critical decisions you can make is choosing the right people to surround yourself with. When it comes to your finances, this decision is even more crucial. You need to trust that your tax and financial professionals have your best interests at heart and are working to help you achieve your goals.
However, not all tax and financial professionals are created equal, and it can be easy to miss the signs that the relationship is failing. Here are eight things to look out for:
1. Lack of Communication
If your CPA or advisor is taking their time getting back to you or only pops up during tax season or annual reviews, it might be a sign they’re not giving your financial needs the attention they deserve. Tax planning is something that needs to happen year-round, not a race to file or catch up at tax time.
2. Lack of Proactivity
Your advisor should be invested in your business and your goals, and as such, they should be working to identify opportunities for tax savings, investment strategies, or financial growth. If they’re not suggesting new strategies or regularly updating your plan based on changing circumstances or market conditions, you have a transactional relationship, not a strategic one.
3. One-Size-Fits-All Approach
One of the biggest issues in financial planning is the use of templatized approaches. While these approaches may be easy to implement and minimize risk, they often miss significant opportunities for growth. If your advisor isn’t asking questions specific to your goals, lifestyle, or business needs, it’s a sign they may not be fully engaged in your financial success.
4. Limited Accountability and Transparency
Are you paying your advisor for time or based on the return they deliver? A reliable advisor will happily share details about their fees, the services they offer, and the reasons behind their financial advice. If you’re having trouble getting straightforward answers or feel unsure about how fees are structured, it might be a sign that things aren’t as clear as they should be.
5. You Seem To Be Pulling Them Along
If you find yourself driving the relationship and identifying errors and oversights, it’s probably not working in your best interest. A good advisor should be proactive and engaged in your financial success.
6. Reluctance to Educate
A good advisor supplies clients with knowledge, helping them understand financial concepts and the reasoning behind specific strategies. If your advisor dismisses your questions or avoids explaining strategies in an understandable way, it might indicate they’re not committed to your financial literacy.
7. Conflicts of Interest
Keep an eye out if your advisor seems to favor products or services that benefit them financially, like commission-based options, without having an open chat about why they’re right for you. Advisors should be upfront and honest, sharing any potential conflicts of interest.
8. Disregarding Your Comfort with Risk
Feeling comfortable with the level of risk in your investments or financial plans is super important. If you find that your advisor is nudging you towards high-risk options that make you uneasy, or if they’re unable to clearly explain the risks/rewards involved, it might be a good idea to take a step back and rethink the relationship.
At Davis, we recognize these signs and our model is set up to deliver a different kind of experience for our clients. Our values are centered around being easy to do business with, results-based, and genuinely caring about our clients. If you have doubts about your current tax and financial professional, it’s worth exploring alternative options.
