Ian Portsmouth: Welcome to the Business Coach Podcast, an advice-oriented series that tackles the top issues and opportunities facing Canada’s small businesses. I’m your host, Ian Portsmouth, the editor of PROFIT Magazine and we’ve developed this podcast in cooperation with BMO Bank of Montreal.
If you are the operator of your own practice in accounting, law, wealth management or any other professional field, then this episode of the Business Coach Podcast is for you. Joining me is Peter Merrick, the president of Toronto based MerrickWealth.com. Peter is one of Canada’s leading specialists in financial planning for business owners and has more than 300 published articles to his credit. But recently, Peter directed no small part of his energy to writing The Trusted Advisor Survival Kit also known as the T.A.S.K. In it, he and 45 other professionals shared their best advice on a vast array of topics from how to market professional services to how to protect your practice from creditors. Peter is here to share some of the best tips and insights from the T.A.S.K. Peter, thanks for joining the Business Coach Podcast.
Peter Merrick: Thank you very much Ian.
Ian Portsmouth: So, your book is called The Trusted Advisor Survival Kit. What does it mean to be a trusted advisor? That’s certainly a term that I’ve heard a lot over the past few years.
Peter Merrick: First of all, a trusted advisor is earned. There are many professionals who are advisor in accounting, legal, financial planning, insurance. But their client has to designate the advisor. And what I mean by being earned is there are three questions that the client ask themselves before they actually appoint someone to be a trusted advisor or to become eligible to be a trusted advisor and I would like to share those with you. The first question that the client asks is “Can I trust this person”? And really what trust is is the advisor is perceived by the client doing the best for themselves and also for the client. Number two, “Is the advisor committed to excellence?” Meaning the advisor doing the best they possibly can today but they’re also having an eye in improving themselves and bringing greater solutions to the client in the future. And last “Does the client perceive the advisor as caring for them?” Because it doesn’t really matter the skill set that the advisor has, if the client perceives the advisor not caring for their needs and their best interest, they’re not going to be interested in finding out what services or solutions they can provide to the client. And that’s really in essence what a trusted advisor is. It’s an earned designation and it is who the client appoints.
Ian Portsmouth: Now, what’s the difference for me between being a trusted advisor to a mere supplier of professional services? Does this mean I can charge higher rates so that I might have a higher retention rate?
Peter Merrick: It doesn’t necessarily mean you can charge higher rates. What it does mean is there are more opportunities to do work with the client. Because the client sees the advisor, the trusted advisor as key to implementing their success so they’re going to include them in their thought processes before making decisions. And what that means is they are going to be calling the advisor more often and including them into more opportunity and that’s going to result in more billable hours for the trusted advisor, because they are going to be so key to the decisions that the client is going to make just for today and also going forward.
Ian Portsmouth: Let’s talk about what you believe is the number one challenge for professional service providers who want to build bigger and or more profitable practices. So what is the number one challenge and how should one address that particular challenge?
Peter Merrick: One of the big issues that most advisors are facing right now is the fact that much of what they offer are considered a commodity and if a client sees an advisor providing a commodity such as accounting services or selling insurance or wealth management or providing legal services, really, they can be easily replaced. So what is key is that the advisors make themselves very useful and very intrical for the client and higher financial goals and life goals. And in essence, they are not that replaceable. For example, a trusted advisor really doesn’t perceive dealing with problems, they deal with solutions and the client appreciates this. It is clear that as I mentioned earlier more opportunity is going to arise whether there is going to be more profitability by working with a client and having a full invested interest in having a holistic plan and basically being integrated into the entire decision making process with the client, there is going to be more opportunity and again more profitability.
Ian Portsmouth: Let’s talk about some of the best ways for professionals to build their practices. Many of these are in the T.A.S.K. Let’s start with referrals. A lot of professional advisors get a lot of their new business through referrals, so what would you recommend a professional do to generate more high quality referrals?
Peter Merrick: The most important thing that an advisor, a professional can do is really go back to Socrates famous statement, know thy self, know what exactly what your skill set is and what value you actually provide. And at that point, then broadcast that out and use the new mediums and use clients to referrals but be the best, contract the brand. What I mean by contracting the brand, if you are an excellent generalist like a project manager, let people know, let them know how to find you and what’s going to happen is by investing in clients and contracting the brand and working with clients where you are working with more issues, when situations arise and they are in conversation and something happens, they are going to get you involved, they are going to get you involved with their other professionals they are working with and their friends and family. You want to clone them but you also want to know exactly what your strengths and weaknesses are. If you focus on doing what you do best, people will be attracted to you and the people working with you will look at you as being an expert and they will refer people to you. Again, there is new technologies out there such as the internet that people can use to let people know where to find them and that’s what’s really important such as blogging, have a great internet site, but really having a unified message so when that potential person is looking for you, they’ll be able to find you and your services.
Ian Portsmouth: In the T.A.S.K., you talk about I believe the 150 principles and this has to do with the number of clients that any professional service provider can actually service. How important is it for professionals to make sure that they have the right clients and how do you go about selecting who is a good client and discriminating who is a bad client?
Peter Merrick: Well, 150 comes from studies that happened in zoology where they discovered that the average human being can only manage about 150 relationships and they discovered this by looking at military organizations and what was the optimal size where spies could infiltrate and Mennonites groups. So it’s really important to actually know exactly who your ideal client is and by knowing who your ideal client is, and again knowing exactly what you can provide and by asking those questions like what services do you like providing, what is the ideal client. In the industry, there are two definitions that advisors should be aware of. One is spiritual vampires and spiritual angels. A spiritual vampire is a client who calls you up and you see them on the caller display, you don’t want to pick up the phone. Those are not clients that you want to clone. Spiritual angels are people who you want to pick up the phone. And there is really three questions that anyone should ask as a professional when choosing clients. One is, do we share the same values? If the client doesn’t have the same values, you shouldn’t be focussing on them, it’s like trying to get water out of a stone. Two, if there are opportunities, can we work together? So for example, if I am in a camp and someone needs the, let’s say, get a back massage, in essence, I am not the person. And can we work together? So for example, I might like working in the morning and you might like working at night, it might not work. But again, if we share the same values and we are able to work together, we’ll find the opportunity and that’s the beautiful thing about being a trusted advisor. The client will approach you and new opportunities to assist that client will arise and that’s where referrals will come, that will mean meeting collateral professionals and in essence, becoming more profitable especially in this new age.
Ian Portsmouth: A lot of professionals work so low and in small offices and therefore, they don’t have a lot of exposure to complementary professionals. How can professionals hopefully trusted advisors partner with other professionals to generate and retain customers?
Peter Merrick: Again, I would stress to know exactly what your strengths are and then know when to bring in the right people. Now, in biology, there is no two species that can inhabit the same habitat that do the exact same things. So the advisor should be asking himself before working with an advisor, do I add value to the relationship by being involved, and vice versa. Does this collateral professional add value? If they don’t, then that’s not the collateral professional you should work with. So it’s really important to develop strong relationships with professionals but also the fact that it’s complementary, it’s not competitive and in essence, you are going to work together and in essence, your interests are their interests. You being able to be there profitable is beneficial for them because you will be able to bring opportunities to them and vice versa. So to be for mutual benefit. There are three types of professionals out there. There are those who are win-loose so they only want to win and they really only gage things by you loosing as a professional. There are those who like to win and don’t care whether you win or loose. And the professionals that we should all be looking at, collateral professionals to work with are professionals who are win-win. They will only get involved because they want you to win for them to win. In essence, they know the pot grows bigger by each and everyone adding to it.
Ian Portsmouth: It’s all about symbiosis. Peter, that’s all the time we have. Thanks for joining the Business Coach Podcast.
Peter Merrick: Thank you so much Ian.
Ian Portsmouth: Peter Merrick is the president of Toronto based Merrickwealth.com. His new book The Task, a Trusted Advisor Survival Kit is published by LexisNexis Canada.
That’s it for another episode of the Business Coach Podcast. Be sure to check out other episodes, which you can download from BMO.com, profitguide.com and iTunes. If you have any comments or suggestions about the podcast, then please send them to me at email@example.com.
Until next time, I’m Ian Portsmouth, the editor of PROFIT Magazine, wishing you continued success.