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Pulling in the same direction

2 min read

It is perhaps a cliched expression that no one person is an island, but it should certainly be true that your professional advisors do not work in isolation.

Most people with professional advisors have one particular individual they choose to contact before the others and, if they are lucky, they trust that person and that person merits the trust bestowed upon them.  Very often that person becomes a gate-keeper for other professional advisors.  A frequent scenario would be a small business owner who has come to trust and rely on his accountant over many years of trading. He realises that he might need to get his affairs in order and so asks for recommendations for a solicitor and a financial advisor, or maybe other persons adjacent to these roles.

Hopefully the accountant has taken their time to develop connections over the years, perhaps through networking or simply by having reliable business associates with whom they have developed a mutual referral relationship.

The best scenario for the client in this situation however is not simply an introduction or the passing of a business card.  The majority of people benefit from having their professional advisors work closely together.

Perhaps in our scenario our client wishes to carve out a new category of shares in his company that carries capital value and give those away.  Simultaneously he is keen on settling on Trust some other wealth, perhaps a rental property.

The solicitor will hopefully be very well equipped to provide all the relevant paperwork both to create the new shares and enact the settlement, as well as deal with all the relevant compliance.  He is unlikely however to be able to work out the appropriate share values so he should be turning to the accountant for his assessment for the company value and the value of the newly created shares.

Equally what if the client fails to survive seven years from gifting his rental property into the family trust?  At this point the financial advisor should be introduced to talk about appropriate life cover to mitigate against any risk and perhaps explore other options, for example extracting wealth from the company into a pension to help save tax and provide for a secure retirement.

The most effective way for this to proceed would be for the three advisors in the scenario to work together as a unit for the best interest of the client.

When speaking to your professional advisor about these introductions it is always worth making sure that they will not only speak to you but also that these professional connections will speak to one another going forwards.  You should not be acting as a middle man for these people, but you should be the lynchpin around which these professional relationships function, presenting you with solutions and ideas, not asking questions which they should be asking one another.

  • James Hall, Managing Partner