Assessing the Advisor-Client Relationship: Consider the Client’s Past Experiences

Larry Gard of Hamilton-Chase Consulting is a member of XPX Chicago
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Second article in a series . . .

If you work as a business advisor, you know that engagements can be unpredictable. Whether helping the owner take advantage of a changing marketplace, or optimizing the business to prepare it for sale, these initiatives typically involve significant planning, coordination, and effort from both advisors and their clients.  Despite the best of intentions, these large-scale projects don’t always proceed smoothly.

There are many things that can affect the advisor-client relationship and make it harder for clients to accomplish the tasks associated with the project.  This article is the second in a series highlighting matters that should be considered by advisors and clients before they agree to work together.

“What’s past is prologue”William Shakespeare

While every engagement is different, a client’s experience with a complex project (or lack thereof) ought to be grist for the mill before beginning a new advisory relationship.  Without the insights gained from learning about the client’s past, the client and advisor may be starting from square one.  By taking the time to explore the client’s experience, both parties can identify potential obstacles to success and make a more informed judgement as to whether they are well-suited to work together.

Consider the story of Jacob, the owner of a medical practice that specialized in providing home infusion treatments.  Twelve years ago, Jacob hired a firm to reduce coding errors, automate insurance filing, and streamline patient billing. The process stalled as Jacob became preoccupied with every detail of the project, right down to the font used on patient statements.  What was to be a nine-month project took almost twice that long to complete.  Now at age 60, Jacob wants to sell the practice and retire.  He hired an exit-planning advisor to orchestrate and manage the process.  The advisor began by recommending an expert to conduct a business valuation.  Things quickly bogged down as Jacob questioned the results and the methodology.  He insisted that another valuation be conducted at the advisor’s expense.  Had the advisor inquired about Jacob’s prior experience and had a better understanding of him, he or she might have explained the valuation process in advance and obtained Jacob’s explicit approval beforehand.

A client may have no prior experience working with an advisor on a complex project.  In such cases, the advisor might direct the conversation as follows:

“You say you’ve not worked with an advisor on a complex project like this before.  Since we don’t have that background historical information, perhaps you can think about what it has been like working with the professionals who routinely assist you, such as your attorney or accountant.  How does your work style, your communication preference, etc. mesh with theirs?  Are there certain things that lead to productive interactions with those advisors?  With your permission, it would be useful for me to speak to them so that I can get a deeper understanding of your business history and learn more about how they helped you.  Who may I contact?”

Some clients have had a truly bad prior experience.  Engagements get terminated before they are finished, advisory relationships end on bad terms, and aggrieved clients may consider legal action.  Not all clients will immediately mention these matters and the prudent advisor should inquire, “Have you been fully satisfied with the process and outcome of previous projects?”

If the client wasn’t satisfied, the advisor might pursue the following line of inquiry:

“I can’t imagine that was pleasant, but I also hope we can avoid a repeat.  Let’s talk about what was dissatisfying and exchange ideas about how to make sure things go smoothly here.”

“How do you feel about the communication between you and that advisor?”   

“Were there misunderstandings or misperceptions?” 

 “What was your degree of alignment regarding how the project would unfold?” 

“What prevented the two of you from resolving your dissatisfaction?”

“What’s the most important thing we can do differently to ensure a solid working relationship?”

As clients respond to these questions, advisors should pay close attention to the client’s observations and insights about the prior advisory relationship.  Are there lessons that can be applied moving forward?  Does the client acknowledge, for example, that communication wasn’t timely or that responsibilities weren’t specified?  If no clear considerations emerge the advisor might suggest an incremental approach rather than contracting for an entire project.  This would give both parties the opportunity to grow comfortable with one another.

This is the second in a series titled “Assessing the Advisor-Client Relationship”.  Each week, I will explore a new element affecting the advisor-client relationship in some detail.  These articles will help you understand potential opportunities and obstacles when working on long-term strategic engagements.  The next article will explore the client’s attitude toward change.

Please feel free to reach out for more information or assistance proactively assessing the potential advisory relationship.

Updated: February 9th, 2022

About The Author

Call Me When… 1. A client feels unsure about retirement (or their next chapter) and could benefit from sorting through the head and heart issues. 2. You would like a pre-retirement workshop for clients nearing retirement. Please visit www.donewithwork.org

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