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What is "Advisory" and Why Offer It (With Financial Results)

What is "Advisory" and Why Offer It (With Financial Results)

Learn what advisory means and why you should offer the service at your firm

Brandon Hall
February 18, 2023

Hey 👋 - Brandon here.

Happy Saturday to 914 growth-minded accountants.

Over the next three weeks, I'm going to give you a crash course on how we run our advisory service line.

Here's what you can expect:

Feb 18th (today): What is Advisory & Why Offer It?
Feb 25th: Crafting Your Advisory Service (What Does the Market Want?)
Mar 4th: Marketing, Pricing, and Selling Your Advisory Service
Mar 11th: Fulfilling Projects and Building a High Caliber Team

Let's go.

Special thanks to those who referred at least 5 people to my newsletter:

Jacob Oberlander (https://twitter.com/JacobOberlander)
Andrea MacDonald (https://twitter.com/andreamacdcpa)
Jason Staats (https://twitter.com/JStaatsCPA)

Check the bottom of this newsletter for your unique referral link and I hope to include your name in a future issue!

Today I'm going to tell you why you need to offer advisory services to your clients.

Advisory services allow you to demonstrate your expertise by helping your clients solve painful problems. People will pay big money for painkillers and become raving fans of whoever solves their problem.

Learning how to systematically market, sell, and deliver advisory services will significantly increase your net margins, allow you to pay your people more, and help you build a more resilient firm.

The good news: all of you reading this newsletter can offer productized advisory services in a systematic way to your clients.

Unfortunately, many accountants are too caught up in compliance work and don't have time to develop high-value advisory services.

Firms Don't Have Time to Advise... And Those That Do Don't Know How to Optimize

Over the past few years, I've been actively involved in accountant communities and have coached a handful of firms. Here's why I think firm struggle to offer advisory services:

They don't know what "advisory" means
They are buried in compliance work and don't have time to think about advisory
They haven't done the work to understand what their clients deep motivations and pains are
They bill hourly, which results in a retroactive relationship and sub-optimal financial performance (at least as it pertains to advisory services)

Building a strong advisory service line is not rocket science. Any firm can implement what I'm going to show you over the next three weeks.

Here's what your firm will look like after you successfully implement advisory services:

More Money, Happier Clients, Well-Paid Employees

Learning how to offer advisory services enabled me to build a $2M advisory service line running at 65% margins. Our advisory revenue is about 33% of our total revenue.

What's better: our clients absolutely love the service. Over the past 18 months we have sent 300+ NPS surveys to clients who purchased one of our advisory plans and our average net promoter score is 9.7 out of 10.

By comparison, our tax prep service net promoter score is 7.5.

People love you when you solve their problems and/or give them a framework on how to attack their fears. Their love expands when the relationship is proactive rather than reactive.

On top of all this, our high margins allowed me to implement big performance bonuses for anyone who is delivering advisory services to clients and receiving a 9+ average net promoter score.

These bonuses routinely put my team's total comp at 20-100% above market.

I can hear you thinking "sure Brandon, but your firm is highly unique... this won't work for me."

I used to think the same: that my success with advisory is due to building a strong brand in the real estate niche where clients are wealthier and more sophisticated than your average Joe.

And while those factors certainly help with scale, over the past 12 months, I've helped two 7-figure accounting firms build and learn how to deliver their own advisory offerings. They have each achieved similar financial and client happiness results.

It will work for you too.

Here's my super top-secret formula for success:

You must deeply understand your clients motivations and pains
You must craft a service that helps clients transform by becoming more successful or solving their BIG problems
Your service must be fixed or valued priced and must be "high ticket"
You must leverage a CRM to take great notes and stay on top of the relationship

Like I said, it's not rocket science.

What Exactly Does "Advisory" Mean?

I keep throwing around the term "advisory" so let's talk about what it actually means.

In my opinion, advisory simply means helping the client solve a problem.

Many of you likely already offer advisory through ad-hoc calls and answering client questions as they come up.

But if you are like most firms, you haven't clearly defined your advisory service and what value it is intended to provide your clients. And you probably don't have a systematic way to market, sell, and deliver advisory services at high success rates.

In the coming weeks, I will help you craft a clear advisory offering.

You will learn how to market, sell, and price your advisory service. I'll explain why hourly billing results in sub-optimal financial performance with advisory services. And you will learn how to manage the fulfillment of the service and ensure your clients are receiving great value.

My hope is you walk away with a clear offering that gets clients excited to buy (and a service you love to deliver).

I'll leave you with this to chew on... our advisory service for all new clients:

Tax Strategy Foundation - Learn tax moves you can make today and how to build a tax-optimized real estate portfolio.

Simple, clear, and effective.

Your 4-Week Gameplan

Over the coming weeks, here's what you can expect each Saturday:

Feb 25th: Crafting Your Advisory Service (What Does the Market Want?)
- How to identify client motivations and pains
- How to productize your service to deliver high value and earn high margins
Mar 4th: Marketing, Pricing, and Selling Your Advisory Service
- How to market and position your service
- How to price your service and consistently test new prices
- We'll walk through my sales framework (and get you out of sales!)
Mar 11th: Fulfilling Projects and Building a High Caliber Team
- How to manage relationships and projects
- How to build a high caliber team to deliver these services

I'm going to spend a significant amount of time writing these upcoming emails. I want to avoid generic advice and make them hard-hitting how-tos.

So I think it's fair to assign you homework :) I think it will help you with the upcoming content.

Email me with your answers to the following three questions before next Saturday:

When you are speaking with a prospective client, what are the main reasons they are looking for a new accountant?
Think about past client relationships that didn't go so well. What feedback did the client give you as to why they were unhappy?
Think about your best clients today. Why do you love working with them?

See you next week.

That’s all for this Saturday.

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