Rollin’ in it
Money! That’s what I want.
Ever since Croesus of Lydia went wading in the Pactolus, we humans have been rolling with the root of all evil. And ever since he lost it all, got his country stomped out and died a cautionary tale, we’ve worried ourselves sick over same. Entrepreneurs and business owners above all live with the possibility of a single financial misstep ending their careers with a whimper.
Why you need a financial advisor
Ain’t necessarily so. Small business owners and self-employed professionals alike all too rarely take advantage of a resource tailor-made to avoid both Chapter 11 and being conquered by Persia: expert financial help. A financial advisor may sound like a luxury for the super-rich, but in practice, having a team member tasked to manage the money and make it work is smart for the wealthy, but indispensable for the up-and-coming.
Here follow four ways a dedicated financial advisor can enhance the prospects of startups, small business owners, and even self-employed professionals like your humble narrator.
One
They know what they’re doing (and you may not).
Let’s be real: entrepreneurship takes ego. Nobody hats up and starts a business unless they believe they’re smarter, tougher, and more capable than their cube-comfortable peers. We know what we’re doing. We don’t like to admit there are things we can’t handle. But the plain fact is, when small businesses fail, and 4 out of 5 do, it’s usually about money management, or more accurately lack of same.
I guarantee that 4 out of 5 thought they knew what they were doing too, up to the exact moment they found out they didn’t. It’s not about lack of experience, either: per the Corporation For Enterprise Development 37 percent of experienced business owners fall short of expenses. Hiring a financial advisor means an extra expert eye on the thorniest, most treacherous aspect of small business ownership.
Two
They’ll plug you in.
Networking is everything. Everybody knows that. Running a business always comes down to how well you work with your fellow h. sapiens. But even if you’ve got your people skills on lock, how do you get past your threshold? You can be as pleasant and personable as the day is long, but unless you’re God – you’re not God; you’re probably aware of that, but I did mention entrepreneurs and ego – you don’t actually know everybody.
Financial advisors do. Like other consultants, financial advisors invariably have a phonebook’s worth of leads and contacts in their area of expertise. Want to expand the scope of your business? Knowing what everybody is doing at all times is literally a financial advisor’s job. They have an in with everybody. They have to. That knowledge alone is worth the money.
Three
They cross-pollinate.
“Cross-pollinate” is the term used by Barry Glassman of Forbes in his superb article on the value of advice to small business owners. The huge list of contacts maintained by financial advisors doesn’t just mean new business opportunities. It means new ideas from the whole scope of your industry, a chance at ground-floor involvement with… pretty much everything worth your time.
Four
You succeed, they succeed.
There are several compensation models for financial advisors in the United States, but they all have one thing in common: they get paid better when you get paid better. For fee-only advisors, that rule is absolute: they are compensated solely by the client, usually as a percentage of assets under management, and have a fiduciary duty to act only in the client’s best interest.
Fee-only is comparatively new: financial advisors have traditionally been compensated with commission on the sale of financial instruments. But commission-based advisors aren’t Snidely Whiplash twirling his mustache either. For one thing, they’re by definition cheaper: no fee, just commission on what you personally choose to buy. The lower price makes the commission model well suited to accounts that require comparatively little oversight, either because they’re not particularly active or because you have the financial expertise to handle most management tasks yourself (but refer to entry 1!). Dubious doings aren’t unknown, particularly the dread “churn“, but no more so than in other financial professions.
As with money itself, the question of advice comes down to poor old Croesus of Lydia. Remember him? King of Turkey, literally invented money, and he ended up set on fire and only extinguished because he screamed something interesting. Know how he got there?
Didn’t listen to the right advice.
No reason to fail
Expertise matters. Specialty matters. Having enough hours in the day to get the work done most definitely matters. Every one of those things gets better with the service of a reliable advisor. That’s how you conquer the world.
#FinancialAdvisor
