There are various reasons why you may find yourself needing to hire a financial advisor. Whatever the circumstances, selecting the right person and firm to work with can seem like an overwhelming process—but it doesn’t need to be.
A good financial advisor for business should be able to look at your business holistically, providing guidance in the areas of strategic planning, new business development, operations, and governance. They should offer ideas on ways your business can improve, generate cost savings, increase margins, position its product or service offering, and help prepare your business for its next stage of growth.
There are many good financial advisors out there, so the key is finding the right one for you: one that understands your situation, speaks your language, and can help you navigate the circumstances you and your business are facing.
Here are 4 qualities to consider when learning how to choose a business financial advisor.
What Is a Business Financial Advisor?
Before we jump into the qualities you should look for, we want to be clear that a financial advisor for business owners is not the same financial advisor you might have for your personal investments or wealth management–and it’s important to understand the difference.
While they share the same title, they are two different people with uniquely different skill sets. A financial advisor for business will help you develop a solid financial strategy, including day-to-day cash management practices (i.e., cash flow), forward-looking financial projections (path to profitability), capital sourcing, and lender communication.
Understanding these differences can get you started on the right path to finding the best professional to assist you.
Quality #1: Core Value Alignment
One of the most overlooked steps when figuring out how to choose a business financial advisor is core value alignment.
Alignment at the core value level is paramount to creating not only a meaningful relationship but also achieving positive outcomes for the long-term success of your business. Being aligned on fundamental beliefs allows for more time to be spent efficiently working on the task at hand.
To learn about a financial advisor’s core values, ask probing questions about how they would handle different situations and why. For example, how would they work with the various stakeholders of your business, such as vendors, customers, employees, and lenders or investors? Do their answers align with what you believe and with how you would approach the situation?
Time and time again, our experience has shown us that if you are aligned at the core value level, you can work through almost every situation—regardless of how difficult it might be.
Quality #2: Clear Communication
While this might seem like table stakes, you would be surprised how often a failure of clear and concise communication adds unnecessary complexity to a situation.
A good financial advisor for business owners will be able to take a complex situation and break it down into easy-to-understand steps and pieces of information, explaining how each relates to your business.
If you don’t understand something, don’t be afraid to ask your financial advisor to explain it another way until you are comfortable with what is being discussed. Be clear about your expectations for the frequency of communication—you should never feel like you don’t know what is going on or where things stand. When in doubt, overcommunication should be the default expectation.
Quality #3: Related Experience
Financial advisory is a broad offering, so it’s imperative that you select an advisor who has experience and expertise in the specific area of business you most need help with.
For example, a financial advisor who specializes in the biomedical industry might be a very capable individual but may lack the domain knowledge to effectively help your commercial construction company.
Ask the financial advisor you’re considering to provide examples of past situations that mirror the circumstances your business is dealing with. Make sure they understand where you are coming from, what you view as a successful outcome, and what you want to achieve for your business in both the near-term and long-term.
It’s also important to ask what tools and processes they will utilize to help your business—and whether they will train you to use those same tools and processes after their engagement is complete.
Quality #4: Presence and Availability
Does your financial advisor listen more than they talk? Are they actively engaged when you are speaking? Are they asking probing questions, listening carefully to your answers, and then asking meaningful follow-up questions? Or does your advisor do most of the talking and speak in terms you don’t understand? These are all questions you need to ask yourself.
No one understands your business like you do, so it is imperative that you find an advisor who checks their ego at the door and seeks to understand you and your business first. Ultimately, you are unlikely to achieve your desired outcome if your advisor doesn’t understand your point of view—or thinks they know your business better than you do.
Make sure the financial advisor you’re considering has the capacity to take on your project. Communicate your desired timeline and the scope of work you want completed. Ask your advisor to present a plan with key milestones outlining how they would accomplish what you’ve described—and make sure it aligns with your expectations.
Find the Right Financial Advisor for Your Business
Choosing the right financial advisor shouldn’t be an intimidating or overwhelming process. Keep these 4 qualities in mind as you interview prospective advisors, and you’ll find one that adds real value to your business.
Many businesses go through periods of stress or distress—you are not alone in this process. If you would like to talk and learn how we help companies navigate times of stress or distress, contact JACO Advisory Group. We would welcome the opportunity to learn more about your business and the challenges you are facing.
About Jeff
Jeff has over 30 years of strategic planning, business development, and business transformation leadership experience. Having worked with mid-market, closely-held and family-owned businesses his entire career Jeff has a unique understanding of how these enterprises operate and the challenges they face.
He is passionate about working with business leaders to build strong cultures while developing and executing strategies that deliver exceptional results that benefit all the company’s stakeholders. Jeff’s hands-on approach to working with companies begins with a commonsense approach to strategy development.
With extensive experience in organizational turnaround and growth Jeff follows a defined process (disciplined, focused, intentional) to guide clients from strategy to execution. His experience covers a multitude of industries, with an in-depth understanding of automotive manufacturing.
Jeff holds a Master’s in Business Administration from the Capital University School of Management and earned a Bachelor of Arts in Business Administration and Management from Ohio Dominican University.
He is a Certified Turnaround Professional (CPT) by the Turnaround Management Association and is a Certified Exit Planning Advisor (CEPA) by the Exit Planning Institute.
