Business owners prefer to seek advice from their accountant rather than their lawyer, bank, business coach or financial planner, according to a new survey.
A survey of more than 840 business owners across Australia and New Zealand, by business advisory firm MSI Global Alliance, reveals 64% of participants seek general business advice from their accountants.
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According to the survey, 38% approach their accountants for advice on business strategy, while 90% ask their accountants for advice on personal tax structures.
Participants made their selection against a grouping of other advisers including lawyers, banks, financial planners and business coaches, suggesting accountants hold sway with regard to their business clients’ decisions.
While financial planners led the way as the most trusted source of retirement planning advice at 40%, accountants followed closely behind at 37%, despite the fact that accountants are not permitted to offer financial advice specifically to clients.
Meanwhile, only 10% of participants rate their bank as their most trusted source of advice with regard to business finance and retirement planning.
Participants say their trust their accountants, lawyers, financial planners and even their business coaches more than their banks in this regard.
MSI Global Alliance spokesperson Charles Hornor says while it is no real surprise to see accountants rated so highly, it was interesting to see how SMEs perceive each of the other kinds of advisers.
“Overall, lawyers scored highly, as did financial planners, although the latter clearly still have work to do to convince business owners that they no longer earn commissions on funds under advice,” Hornor says.
“On the negative side, business coaches were rated poorly generally with business owners, clearly lacking an understanding of the value they offer or their core services.”
“However, the worst was saved for the banks. While the banks are all currently engaged in a public battle over cutting fees and interest rate levels, business owners are dismissive of their efforts to understand their needs. Trust seems to have broken down almost entirely.”
Nicholas Hossack, acting chief executive of the Australian Bankers’ Association, believes banks are working hard to increase their relevance to small businesses, citing recent advertising campaigns as an example.
“Small business did experience a tough trading period throughout the global financial crisis… Weaker trading conditions can undermine small business balance sheets due to reduced revenues,” Hossack said.
“Unfortunately, some small businesses have experienced cashflow problems… This has caused banks to decline loan applications because of the businesses’ reduced ability to repay their loans.”
The MSI Global Alliance survey asked participants to comment on how each adviser could improve on the value of the services and advice they offer.
It was revealed that participants don’t believe bankers understand SMEs and simply aim to make as much money as possible in penalty fees.
One participant said: “[Banks] would do better to see the big picture with business customers and have representatives who are more highly skilled in understanding the needs of small business.”
While participants favour advice from their accountants, it appears there is room for improvement.
In advice terms, participants say accountants are too focused on past performance rather than the future and don’t like to leave their offices.
One participant says accountants should “show me options I’m not familiar with. If I was up to date on all accounting and tax issues, I wouldn’t need you.”