Why Financial Planning is so Complicated for Business Owners

2. Lack of experience with business owners

Let us say that you find a planner that has a wide array of products they have available, and they are not attached to any specific company.

Have we hit a home run…

Not necessarily, when it comes to the needs of business owners most advisors just do not have the knowledge or experience to be able to serve them properly.

Financial planning for business owners can be quite complicated.

There are so many moving components involved:

• Tax issues
• Risk management
• Corporate investments
• Estate planning
• Sale of company,
• Surplus earnings
• Bringing family members in
• Keeping employees happy

Most advisors work with simple financial matters that are common with clients who do not own shares in a business.

But the problem comes when they accept business clients and try and “wing” it to figure it out.

You do NOT want to be the guinea pig for an advisor learning in the corporate market.

This is your business and your life; you need a planner that specializes in working with business owners and has a proven system to ensure nothing is missed.

3. Poor communication between other advisors

This is one of the more common problems that we come across when working with business clients.

You might have a…

• Financial planner
• Investment advisor
• Insurance advisor
• Accountant
• Lawyer

….and not even one of them has had a conversation with one another!

How frustrating this can be to business owners, having your financial advisor tell you what to relay back to your accountant is like a game of telephone!

It not only wastes your time, but it can lead to significant problems if something is missed in the planning process.

• Lawyers could set up corporate structures that could cost you extra taxes because they did not talk with your financial advisor
• Accountants could leave you with liabilities because they didn’t talk to the lawyer
• Financial advisors could cost you extra taxes and unnecessary liabilities because they did not coordinate with the accountant and lawyer

Is it supposed to be you?

Absolutely not!

Your financial planner should be responsible for coordinating all your financial affairs between advisors.

But unfortunately, a lot of them just do not take on that responsibility, assuming that you will be able to play a complicated game of financial telephone between your professionals.

4. Poor communication with you

At the end of the day if you find a great firm that can handle your financial affairs, but your true goals and values don’t get properly articulated then you’re going to be no better off..

You can think of financial planners somewhat like building architects, they figure out what you are trying to build and then disseminate that information between all the relevant professionals.

However, if your vision is not effectively communicated then they are going to start building something that doesn’t match your vision.

It is the planner’s responsibility to find out what you REALLY want and execute on that.

But sometimes planners can get excited about a particular strategy or vision that they have and forget that they’re supposed to be building your house; not theirs.

Ensuring that your goals and vision is understood by both sides is critical to ensuring you are on the right path to achieving them.

5. Not doing anything

This one is straight forward but there are good reasons behind it and we understand.

With all the potential problems listed above, it can seem like an obvious choice to push back hiring a financial planner…

There is a general lack of confidence with advisors and real concerns like…

• Being taking advantage of
• Being sold something not in your best interest
• Getting involved in a scam
• Overpaying on fees
• Being ripped off
• Making a mistake
  

But having no financial plan and not doing anything is potentially going to cost you your long-term goals and could leave you at risk of unforeseen liabilities.

You need to find a planner you can trust that will give you peace of mind, simplicity, and confidence in your planning.

I know it can all seem daunting, but the best thing to do is educate yourself on what to look for in a planner and ensure you are getting the best possible advice.