Choosing A Professional Advisor

The skills needed to run a successful family business—the agility to capitalize on emerging opportunities, the vision to see the big picture and the experience to stay the course in rough waters—may not be resident within every senior management team. Most family business executives recognize the need for professional advisors to fill the roles on their team that are outside their core competency. That's where professional advisors can make a critical difference to help your company plan ahead and achieve greater results.

Choosing a professional advisor—attorney, accountant, banker, investment expert, and so on—can be a daunting task. With that in mind, here are some tips to guide you through the process:

Make sure that the prospective advisor knows your industry or is familiar with your business model. Not only will this knowledge help your advisor to contribute to your success soon, but your advisor may be able to introduce you to non-competing companies in your industry for networking and resource sharing.

Investigate the breadth of the resources available from your advisor. Your advisor should offer all the services your company needs today and most of the ones you may need in the next 5 years. In general, if you're a growth company, you may want to choose an advisor who is associated with a firm that has more services than you need right now since it's likely you'll grow into them soon.

Do you "click" with your main service provider? This can be tough to fully appreciate in one meeting, so it's advisable to schedule a second meeting with prospective advisors that warrant it.

It is advisable at this point to raise the question regarding who you'll actually communicate with during the relationship—the person you're talking to now or someone else. If the latter is the case, you'll want to meet this person, too.

While you're at it, you'll want to assess the relative "bench strength" of your advisor's firm. Depending on the size of your company, it may be helpful to have a team of profes­sionals that delivers the services you need. That way if one person leaves the firm, the rest of the team can pick up the slack with little dis­ruption to you.

Create a checklist of the core services you'll need so you can ascertain whether or not the advisor or the firm is experienced in each area of practice. Your goal is not to be the proving ground for a new service area that the advisor or the firm may only be thinking about offering right now.

Read and contemplate the advisor's mission and/or vision statements. Do the values espoused here fit well with your values and those of your company? Significant philosophical harmony for the future can be predicted based on this simple step.

Request at least three references that are similar in size, industry, need and growth pattern to your company. This will raise the possibility that you'll get references that are truly representative of the firm's clients. Also, for the references, create a list of questions that cover your "nuts and bolts" needs, but also be sure to include questions that will help you ascertain the advisor's ability to look out for your best interests.

Ask your other advisors and people in your network for their impression of the advisor and/or the advisor's firm. The broader the spectrum of input that you can gather, the more informed your decision can be.

Check out the advisor's Web site. Is there good information there that demonstrates the advisor's dedication to educate and serve clients? Is the information current and updated on a timely basis? Is there any disconnect between the prose on the Web site and the things you've heard from the advisor or the advisor's references?

Are any other third-party opinions available? Places to check might he the Better Business Bureau or an Internet search engine just to see if any positive (or not-so-positive) articles pop up. In the case of accountants, you can request a copy of their triennial peer review report.

Does the advisor conduct formal client satisfaction surveys? If so, request a copy of the questions and a summary of recent ratings from the program. This may be more telling than all the reference calls you'll make put together. You may also want to ascertain if the advisor has any client service standards in writing that are available for your review.

You may want to explore the various affiliations of the advisor including chambers of commerce and industry group memberships, professional affiliations or strategic alliances. The more memberships, the more likely it is that the advisor is well connected and well aware of the resources available for companies that need them, such as yours.

When making your final selection, you may want to use the process generally used in Olympic competition—throw out the high and low score since there may be some unfair bias involved that is not otherwise self-evident.

Research says that the average length of a professional advisory relationship is 7 years, but it's probably twice that in some places. In light of this, it pays to do your homework. And, keep in mind that once you have selected your advisor, the more you involve your advisor in the operations and strategies of your company, the greater his or her value will be to your company over the long haul.

Reprinted with permission from The Family Business Report sponsored by the Goering Center at the University of Cincinnati College of Business Administration.