Choosing the Right Advisor for Your
Make Sure you Ask These Questions!
Did you know that only about one third survive as family
owned businesses into the second generation and only 12% make
it to the third generation? With this in mind it is clear
that they deserve and require expert advice from uniquely
qualified and trained advisors.
Freud once said that all we need for happiness is 'love and
work'; both are at stake in family businesses; they have much
to lose and much to gain. Yet, surprisingly, family businesses
often don't ask the right questions before they hire an advisor
or consultant and end up with advisors not equipped to deal
with the complexities they face. As one business owner (family
business, by the way) claims, an 'educated consumer is
our best customer'.
One question often neglected is "How will you work with
other professionals involved?" Increasing number of family
businesses are turning to a variety of specialists, rather
than placing all their personal, financial, and legal affairs
in the hands of one person. Advisors are also realizing that
families in business have uniquely complex issues that require
the services of more than one professional. They also are
more likely to want one trusted advisor to coordinate the
other professionals. There are several models of consulting
teams, based on how they work together, the level of coordination
and their commitment to each other. Here are several categories
of consulting teams*:
- Interdisciplinary - pre-existing team/firm
- Multidisciplinary - advisors in study group, know
each other's work
- Accidental - connect only through client, work
together with little coordination
- Dysfunctional - unknown to each other, even if
working with same client, no coordination
*Hilburt-Davis & Dyer. Consulting to Family
Businesses, Jossey-Bass/Wiley, 2003.
As family businesses become more sophisticated and aware
of best practices, they will and should ask and expect more
of their advisors. The following questions should begin any
client /advisor relationship:
Questions to Ask a Family Business Advisor
- Have you received special training in working with family
businesses? If so, where and what?
- What issues to you see in the family, business and ownership
- Can you provide us with references?
- How would you help us deal with them? Where would you
- What is the scope of the work? What will it cost?
- Do you belong to a professional society or group that
delivers continuing education focused on the special challenges
of family businesses? Do you participate in these?
- Do you have a network of professionals who you can call
on to help you with the complexities?
- Are you willing to work with my advisors? How will you
prevent the 'team' from becoming dysfunctional?
If you don't get satisfactory answers to these questions,