Insights for
Financial Success

This quote from Marshall Goldsmith also happens to be the name of his best-selling book, and it’s always top of mind for me when I think about which financial advisors business owners need on their team. The essence of the book, and the quote, is that often, when we reach a certain level in our career, doing more of the same isn’t going to get us ahead. We need to shift what we’re doing to get to the next level. 

This is so relevant to financial planning for business owners. Often, business owners already have several advisors working on different aspects of their finances, but they might not recognize that they need more complex planning and can benefit from a higher level of expertise or a more specialized skillset.

Business owners also may not realize that they need these advisors to work together to address more complex financial decision-making – or, even if they do, they might not have the time or know-how to coordinate between advisors. Without a solid, cohesive team of advisors in place, business owners are often left with conflicting or confusing financial advice.

So what’s a business owner to do? This blog post will cover what a financial advisory team typically looks like for a business owner, and provide recommendations for how to assemble a financial “A” team that works for you and your business. 

Typical Financial Advisors for Business Owners

Typically, when business owners first approach me for financial planning, they already have a number of advisors helping them with the money side of their business and personal planning. This might include:

• An accountant who helps with tax filing
• A bookkeeper who assists with invoicing or payrollA bookkeeper who assists with invoicing or payroll
• An investment advisor
• An insurance broker
• A lawyer who helped incorporate their business
• A marketing consultant or business coach supporting revenue growth

However, a common theme is that usually, none of the business owners’ advisors know or work with one another. The tax, financial, investment, insurance, and legal planning are done independently and in silos, with the business owner left to try and tie everything together.

The below diagram illustrates how most business owners interact with their financial advisors.

As mentioned, this can present a few challenges. Let’s take a look at a common situation that might arise.

How Much Should I Pay Myself?

This seems like a simple enough question for a business owner to ask their financial advisor. However, the answer is anything but; it depends on a number of factors:

• How much does the business owner need on a regular basis to cover personal cash flow needs?
• What are the corporate vs personal tax rates for the business owner (and potentially their spouse)? What should be done to optimize their tax planning?
• What is the business owner’s retirement plan – do they need to opt in to the Canada Pension Plan (CPP)?
• Does the business owner need salary income to qualify for an upcoming mortgage or insurance approval?
• What is the best avenue for the business owner to accumulate savings? Should they do it within the corporation, or pay themselves more to accumulate wealth personally?
• Should the business owner take payment in the form of a salary or a dividend?

As you can see, it’s also unclear who the business owner should ask when a question, like this one, arises that spans multiple planning areas. Most financial advisors are specialists who only provide advice within their lane of expertise – as they should. However, this is where it can be useful to have a team of advisors working together to cover multiple areas of business and personal financial planning.

Assembling Your “A” Team of Financial Advisors

Profitable businesses will usually benefit from having a team of advisors that includes the following roles.

When assembling your team of advisors, it’s important to determine whether they are appropriate for your stage of business and planning needs. Here are some questions that you may want to consider asking your advisors to determine if they meet your needs and preferences:

• Are they familiar with your industry and current business stage planning needs?
• What do they foresee as planning needs for you personally and in your business now and in the next 3, 5, 10, or 20 years?
• Are they working with businesses that are larger or further along than yours, and can they provide advice proactively to help you prepare for the next stage of your business?
• Do they typically work with clients’ other advisors in a collaborative manner? If so, who do they typically expect to lead the multi-disciplinary process or discussion?
• How often do they suggest meeting with you and with your other advisors? What topics do they suggest to cover those meetings?

How Often Should I Meet With My Financial Advisors?

In order to cover different aspects of your business and financial planning, here’s an example of a meeting rhythm you could consider developing with your advisors.

In addition to meeting with your advisors individually, here are some examples of situations where joint meetings with multiple advisors are beneficial so that cross-disciplinary issues and items can be discussed collaboratively.

Financial Advisors for Business Owners: Additional Considerations

In building your “A” team of financial advisors, here are some additional questions to consider based on the current stage of your business:

• Who are your current advisors for your personal and business financial planning?
• On a scale of 1 to 10, with 1 being “none at all” and 10 being “completely,” how much are your current advisors collaborating? How much would you like them to collaborate?
• Are there any advisors missing from your current team that you would benefit from their counsel?
• What members do you need to add to your advisory “A” team to give you a full picture of your financial planning?

Who Should Lead My Financial Advisory Team?

One final question (maybe even the most important one). It is crucial to have one of your advisors act as your “lead” advisor to coordinate the planning and meetings with your other advisors – so who should this be? 

For example, in the medical field, a family physician knows your overall health condition and medical history, and refers and works with specialists as needed to diagnose and provide specialized medical counsel and recommendations. The family physician understands complex medical terminology and can effectively communicate directly with specialists, provide follow-up care, and continue monitoring the patient over time.

When it comes to financial planning, we act as the “lead” for many of our clients’ advisory teams. We can help you coordinate your advisors, and understand how a decision in one area might affect a decision in another.

Need a financial planner who understands the big picture of your financial situation and can help you connect the dots between all the different aspects? Book a Financially Smart Discovery Session with us. 

Want To Assess Where You’re At Right Now?

Take the 5-minute Financially Smart Business Assessment and we’ll show you how to make the most of your money across six key financial areas of your business, including your advisory team. 

You’ll receive a customized report with your scores and recommendations for next steps, as well as the option to book a complementary review session.