Skip to content

Defining advisory: best practices for starting an advisory conversation

· 6 minute read

· 6 minute read

Without specifically defining the term “advisory,” starting an advisory conversation with your clients may seem daunting. Situations, clients, and firms differ. How can you determine the best advising strategy for your firm?

In this episode of the Pulse of Practice podcast, “A client story: Help now, more later“, Paul Miller, CPA from Business by Design, and I determine some best practices for starting an advisory conversation based on real-world scenarios and personal experience.

What does it mean to be “okay”?

Firms often believe that advisory clients have many complexities or high net worth. However, sometimes it is the simplest clients that become the most profitable, because it easy to start an advisory conversation with them.

For example, Paul Miller recently worked with a small business that sells real estate. Before coming to his firm, the client had had a friend doing his taxes, describing the friend as doing an “okay job”. What goes through the mind of a business owner that drives him to make that qualitative assessment that their tax service was “okay”?

“It was February, and we weren’t taking on new clients,” said Miller. “He said his friend does an okay job and he is pretty inexpensive. This is a guy that is basically, as I showed him, overpaying his taxes by easily $10,000 to $15,000.”

“I use that story saying, well, you think you paid your friend $400 to do your taxes, but you really paid $10,400.”

When starting an advisory conversation, remember accountants are money savers

The main issue you’ll want to solve when starting an advisory conversation is giving your client the perspective of what is important. In the former perspective of Paul’s client, he was getting a great deal getting his taxes done by his friend. The client saw having his taxes completed as solely a task, and since he was always on time with his estimated payments and never had taxes due, he felt that was enough.

“I said to him, ‘yeah, you could overpay your estimated tax payments and you would have gotten a great refund. What good does that do?'” adds Miller. “I think people measure the wrong things, and when we started going through some of the exercises, he realized the truth.”


Evolve Your Practice: Becoming a Responsive and Dynamic Firm

This exclusive six-episode virtual series on advisory services will show you how to deliver a value proposition to your clients, maintain trust and develop long-term client relationships, become an advisor in a virtual world, manage your firm’s resources and more. Earn up to 8 CPE credits. Learn more.

As accountants, we often discount the fact that we are saving our clients money. This is pure dollars in their pockets. Also, by adding to their profitability, we are increasing their business’ purchasing power. We can then shift the conversation from merely filing their taxes to advising how they should invest their savings.

After starting an advisory conversation about purchasing power, the client was thinking about several different strategies his newly found extra profit would pay for. His wife asked him how much the new accounting firm’s services would cost them. He answered, “it’s not going to cost as much as what we were wasting in taxes.”

A different style of conversation

We hear the term “advisory” used in several ways. Most accountants feel they know what advisory means, so no one takes time to define it. Making it even more difficult, there may be several correct definitions of advisory. However, all we need to do is set context when starting an advisory conversation.

Advisory is a relationship, not a task. A real advisory accountant puts themselves into that relationship space. You’ve saved your client more money, now let’s talk about what they can do with that savings. How can you help facilitate that money intentionally and successfully? We, as advisors, must create a space and time for a different style of conversation with our clients.

“To me, where the real opportunity lies, is to be able to start a conversation,” said Miller. “There is room to grow with that conversation.”

“With this particular client, we just talked for about 25 minutes about the concept of purchasing power and how it works. He said, ‘never in my life has anyone ever explained taxes to me that way.'”

Learn how to start an accounting advisory business in our white paper.

Don’t be afraid to emphasize the simple things when starting an advisory conversation

There is a lot of knowledge and information that we downplay as accountants. We have a strong impact on our clients trying to achieve their goals and objectives.

While it is easy to get bogged down in tasks, your clients want more from their accounting firms. They want to know what is possible and what else we can offer. In Paul’s example, 75% of the conversation with the business was about conceptual, and perhaps another 10% pertained to the actual details or numbers. This is what the client wanted—to be led.

How do you grab the reins when you see the opportunity? Do not be afraid to emphasize the simple things and make a connection for clients. Recognize that what may seem like simple math to us is not necessarily understood or known by the client. Connect the dots for your clients when starting an advisory conversation and see where those connections will take you. You may find success simply by opening the door to inspiration.

Listen to the “A client story: Help now, more later” episode of the Pulse of the Practice podcast on your preferred platform (Google Play, Apple, Spotify, Stitcher) or here.




Evolve Your Practice: Becoming a Responsive and Dynamic Firm

Right now, you have the unique opportunity to build a business model that will serve your clients better and help you plan for a profitable future.

Whether you’re already offering advisory services, or you want to know how to get started, this six-episode virtual series will show you how to:

  • Deliver a value proposition to your clients
  • Maintain trust and develop long-term client relationships
  • Become an advisor in a virtual world
  • Manage your firm’s resources

Earn up to 8 CPE credits. Learn more.

More answers