The smuggler and the donkey: A lesson for accountants

This article was triggered by a post by an accountant, who was thankful no one recommended him to a business owner who was looking for help finding an accountant on Facebook. 

The business owner does their own bookkeeping and was looking for an accountant to just ‘sign off’ their accounts. Sound familiar?

Why we need to change the client’s mindset

Accountants tell me a lot of business owners think like this. They don’t phone up asking if we can do advisory; they typically ask, ‘How much do you charge for a set of accounts?’

Now, just because a client starts off with that mindset, doesn’t mean they won’t buy into an advisory-based relationship. It just means we need to change their mindset. I accept not all clients will engage with advisory services, but we should at least have a process that gives advisory a better chance. 

I believe the best way to do this is to smuggle advisory services in. This is why I mentioned to the accountant the story of the smuggler and the donkey. The story goes like this:

Every morning a man would turn up at the Mexico–US border with his donkey.

After a while, a border guard got suspicious; he suspected the man was smuggling something but couldn’t find anything on him, or the donkey.

This went on for 30 years. Eventually, the border guard said, ‘Today is my last day on the job. Please, I know you have been smuggling all these years. Please put me out of my misery; tell me what you’ve been doing and I promise I'll let you through.’

The man looked at him with a smile and said, ‘I’ve been smuggling donkeys.’ 

For accountants, advisory services are the donkey. In other words, I believe accountants can smuggle advisory services into the client relationship in broad daylight. And, we can do it in a systematic way by using something called the Bucket Concept.

What is the Bucket Concept?

I learned about the Bucket Concept from Paul Armson. He helps financial advisors transition away from basic services like mortgages, insurance and ISAs into lifestyle financial planning. 

The key to making this work is:

1. Understanding that advisory is not about solving business problems but helping the client live the lifestyle they want without fear of running out of money.
2. Being prepared to invest more time when you first engage clients. Instead of one meeting, a proposal and an engagement letter, you have to slow it down. Have two meetings and do some work in between. 

Let’s look at how this process works in practice...

Your two meetings (with some work in between)

The first meeting is primarily about you getting to know the client. I recommended using a fact-finding questionnaire for this because it takes the pressure off you, demonstrates you are a professional and ensures you cover all areas. Use 90% of the meeting to build rapport and a deep understanding of the client’s financial situation – personal as well as business finances.

After you’ve completed the questionnaire, you put your pen down and say, ‘Now, may I ask you probably my most important question?’ 

When the client says yes (they always say yes), look them in the eye and ask, ‘What is your number one overriding financial priority – the one thing that, if you don’t achieve it, you will not be able to rest on your deathbed?’

Be quiet and let the client think because they may never have been asked this question before.

Once you have the answer, you will know what is most important to that person. You can then spend the remaining 10% of the meeting positioning your support as helping them achieve that goal. 

You do this by drawing a leaky bucket and explaining the water represents their cash going into and out of the bucket.

You explain that you can help them with the inflows and outflows throughout their lifetime. Talk about things like:

• Helping their kids get on the housing market
• Building an education fund for the grandchildren
• Allowing them to explore the world
• Ensuring they have the time and money to pursue their hobbies and interests
• Having the peace of mind that they and their family will be safe

This is an incredibly powerful presentation because it’s emotional.

At the end of the presentation you ask, ‘So, are you looking for an accountant who is going to work with you every step of the way, helping you do the things we just spoke about, or are you just looking for someone to do the basics?’ 

Some people may just want the basics and you can choose to take them on or refer them elsewhere. But, at least you’ve given them a chance.

The most likely answer will be, ‘Yes, but how much will it cost?’ To which you reply, ‘I don’t know. First, we need to see what your bucket looks like to figure out what, if any, support I can offer.’

The second meeting is a few weeks later, after you’ve prepared some personal cashflow forecasts and worked out where the client is now and where they want to be. 

At the start of the second meeting, you revisit their bucket drawing, and present the cashflow forecasts with various scenarios based on different ways of working with you. 

These cashflow forecasts show the impact you could have on their life (not their business). Importantly, you will show more money coming into their bucket even after taking your fees into account, nipping any concerns about the fee in the bud.

Emphasising value, not fees

Ultimately, most clients don’t care how much you charge as long as they get what they want. And, what they want is the life they desire.

Thanks to the Bucket Concept, the client will see their dreams coming true right before their eyes. And, they will see their nightmares disappearing. All that is left to do is to agree on a budget.

This approach will inspire clients. It will have an emotional impact on them and they will see you as an investment – someone who will help them through their life journey.

That’s why I urge you to meet with clients even if they say they just want the basics. Smuggle in advisory, in other words, in broad daylight. Give them a taste of the value you can offer – if they like it, they’ll want more.

Discover more ways to improve your client meetings at Agendali.com.