IF YOU’RE RUNNING a business, you know that advice can be plentiful and well-meaning. Unfortunately, it can often be off track — or downright faulty.
As a result, finding the right professionals to help guide you and provide counsel as you build your small company can be one of the most important things you do as a businessperson. And one of the most critical relationships for any small business owner is the one you build with your financial adviser.
It’s no secret that the line between small business owners’ personal and corporate lives is razor-thin, or has even completely disappeared. I speak from experience — my husband Richard and I own JNBA Financial Advisors, a 25-person company that my mother-in-law started 40 years ago.
It’s been such a big part of our lives for decades and our business often blurs into our personal time. We’re more than comfortable with that. It works for us and helps us focus on what our clients need, which is a big part of the value we provide as business leaders. That’s equally true about your financial life, and why it couldn’t be more important to find a trusted financial adviser to help you and your family navigate both sides of the coin — personal and business — since they’re so connected.
As you’re considering a wealth management firm or advisor, ask these four critical questions.
? ? ? 1. What’s your philosophy on small business financial planning?
When working with small business owners, do you advise on both their business’ finances as well as their personal wealth management? Do you offer services that are tailormade for small business owners? Many financial planners are well-versed in areas of concern for business people, but they may not have expertise in advising small business owners on their unique challenges and considerations. Some of these may include exploring retirement savings options available to business owners, building a safety net for your family and your business simultaneously, giving back to your community, creating a legacy for the next generation and developing an exit strategy. A long-term financial partner with small business experience can help you plan for the most important aspects of both your business and the rest of your life.
? ? ? ?2. How are you compensated?
Does the firm or adviser make a commission on the recommended investments placed in your portfolio? How much are you paying in commissions and/or fees for the services provided?
Make sure to understand potential conflicts of interest and determine if you feel the adviser is always objective. By definition, a Registered Investment Advisor is held to a fiduciary standard and has a fundamental obligation to provide advice that is always in their clients’ best interests. And being “independent” means there is no tie to a family of funds or investment products of a larger institution, further removing the potential for conflicts of interest.
? ? ? ? ? 3. How well will you work with my other professional partners?
The more successful you and your small business are, the more you’ll find that a team of trusted advisers is key to sustaining that growth. And the right financial adviser can bring together and ensure that all of the key members of your team — including accountants, attorneys, real estate agents and business consultants — are integrated, aligned and pointed in the same direction to achieve your goals and objectives.
Look for someone experienced in taking the reins and acting as your “personal CFO” to ensure that everyone on the team is working together with an eye on both short- and long-term financial, professional and personal goals. Having a trusted adviser who is able to oversee and help hold the variety of professionals you work with accountable and on track is important. For small business owners, it’s especially critical when multiple professionals are working together to develop a succession plan or tax strategy, for instance.
? ? ? ? ? ? ?4. Will you advocate for me?
An advocate is someone who’s always on your side of the table, always looking out for your best interests, and who will act accordingly. I believe it’s critically important to find an adviser who acknowledges that every person, family and business is unique, with different needs, challenges and opportunities — and who will always, without exception, act in your best interest.
For example, several years ago, our firm worked with a woman who had managed a real-estate business with her husband for decades. After her husband died and left her as the sole partner in the business, she was approached by one of her associates. He was a property manager looking for additional funding to keep a construction project moving.
JNBA looked into the request and quickly determined that the man had a history of poor management. But the client explained that her late husband had known the man since he was a child and would have wanted to give him the money. So, we proposed a way to help fulfill her husband’s wishes while protecting her interests, and laid out a plan that held the property manager to a number of conditions. The property manager had no choice but to agree to the terms. Our client was happy with the compromise, and her associate committed himself to a sensible budget and completed the construction.
Helping people navigate situations like this is why we got into this business in the first place — to be an advocate for people and to help guide them through life’s most important decisions. A trusted, objective third-party can remove the emotion from a situation, helping to sidestep the things that keep many of us awake at night — fear, uncertainty, lack of confidence.
The answers you receive to these important questions will go a long way toward helping you choose a partner who is aligned with your values and priorities, and who can help you — and your business — succeed.
Kim Brownis president of JNBA Financial Advisors: 952.844.0995;