“Look for what’s missing. Many Advisors can tell a President how to improve what’s proposed or what’s gone amiss. Few are able to see what isn’t there”
Donald Rumsfeld
Over the years that I have been in the profession. I have seen the role of an advisor undergo a radical change and marked shift on the expectations that one has from the advisor. And over these years, I have seen a few things remain constant. The constants are the bedrock of the traits of an advisor and foundation without which no advisor can be successful. The changes emanate from the evolution of the profession and the changes in the ecosystem in which we operate.
Let’s first talk of the changes; I would describe them as:
– execution is the key
– the broad basing of the recipients
– recognising that change is the only constant and
– no man is an island.
Let me elaborate.
It is all about execution. There was a point of time when what was expected from an advisor was advice and the execution was left in-house. While clients do have execution capabilities, they now expect the advisor to be fully involved and lead the execution process. The reason is simple. The challenges at the execution level impact the advice and its efficacy. Whether the Registrar of Companies (ROC) will approve a Limited Liability Partnership (LLP) carrying on financial services or whether SEBI permits an AIF to be an LLP are issues to which the advice reading the law may be different from how execution happens at the ground level.
There was a point of time when the recipient of the advice was the only constituent who the advisor had to address. No longer so. The wider constituents who can be impacted by the advice today expect their interests to be addressed. This is critical from the view point of the advisor too. Increasingly, if the client is accused for breaking a law, the advisor could have his reputation sullied or be held to abet.
The world is in a constant flux of change. Just in the field of taxation, we grew up to say that tax and equity are strangers. One merely has to look at what the law says and no more, no less. No longer so. BEPS is making changes which will have deep rooted impact on the way a MNC operates. Street protests are held if a MNC is perceived as not paying ‘fair’ taxes. The world of taxes and equity are not as strangers as it seemed!! We need to recognise this change as advisors; in fact, the result of the actions we advise today will be evaluated after a few years and we need to anticipate changes and advice accordingly
Finally, the need is to collaborate with other specialists. An accounting advice has tax and financial implications; a tax advice has accounting and financial implications and, most important, all of these need to dovetail into the overall business objectives of an organisation. As advisors, we tend many a time to forget the overall business objective and focus on the little area of specialisation we have. The broad basing of the objective, the ability to relate to the bigger picture and interaction with other Advisors to provide holistic advice is the key to success.
Let us now look at a few constants which I have experienced over the decades;
– the spirit of partnership
– client before self
– tenacity and
– ethics and values
The identification of the advisor with the client and proactively finding solutions is a key constant. Most times, clients do not know the right questions to ask. It is for the advisor to prompt the client to the right question and guide them in the spirit of partnership.
Client before self may sound like a cliché!! It is not and I have seen the most successful advisors, when proposed an assignment by a client, respond that it is not necessary to carry out the assignment!! Indeed, sometimes the client believes in a complex solution which may mean larger fees to the advisor but the solution can be quite simple. It is for the advisor, at all times, to put client’s interest first. In fact, the best advisors have the ability to tell a client that he is not the right advisor but someone else is!!
Solutions provided by an advisor may be difficult to implement and often the client wants short cuts. Building substance to a transaction is a difficult process. It may be the only way to sustain a structure. An advisor needs to be firm with his convictions and not go down the path of least resistance; howsoever convenient it may sound in the short run
Last, but the most important, is ethics and integrity. Short term gains which compromise integrity come up all the time in a variety of ways. Some of these, like referral fees, may sound innocuous but pose conflicts of interest. Similarly, disclosure of interests or potential conflicts is critical. At the end of the day, an advisor has just one reputation to protect and its compromise is the end of the journey.
