3 questions to ask your advisory team

Most business owners we meet, especially in the trades, don’t feel “behind” because they’re not working hard.

They feel behind because they’ve been on autopilot. And then they wake up one day and have money in a few places, advisors in a few seats, and just a kind of hope that it all adds up to a plan. 

But who’s making sure of it? 

If it’s been a while since all those advisors you have talked together about your goals and your plans, it’s time to set up that meeting. And it’s up to you to make that happen.

Because if you want to climb the BuiltWealth™ Ladder smoothly, you want to be sure that the team around you is supporting your whole climb, not just the rung you’re on today, from their unique lens.

To help, here are three questions you can ask your current advisors in that meeting.

They’re questions we like to ask when we start quarterbacking these sessions for our clients.

And we do mean really ask them. Not in a “gotcha” way. In a, “Hey, are we coordinated, or is there more to be done to get everyone aligned?” kind of way.

1) “When was the last time you called my CPA, or my attorney?”

I’ll tell you why we love this question.

If you were building a custom home, you wouldn’t hire a framer who refuses to talk to the foundation team.

Yet in finance, this happens every day.

Your CPA files your taxes. Your investment advisor manages your accounts. Your insurance agent sells you policies. And individually, they may be doing a great job. That’s the tricky part. In a silo, everybody looks busy.

But the power of everyone talking together on behalf of the business owner is a compound effect you can’t see until you look backwards.

So the BuiltWealth™ standard is pretty simple: you need a general contractor for your financial life. Somebody who quarterbacks the thing.

Somebody who gets everyone to communicate. 

That somebody is likely you today, but doesn’t have to be you forever.

2) “Are we doing tax planning, or just tax filing?”

This is a big one.

Most business owners dread tax season because they’re writing massive checks. And they’re like, “Jason, I feel like I’m getting beaten up.” And I’m like, “Okay, well, let’s confront the brutal facts of reality here. Are we actually planning, or are we just recording history?”

Tax filing is compliance. It’s rearview mirror. It’s, “Here’s what happened.” And listen, you need that. That keeps you out of trouble, it keeps you on time, it keeps you moving.

But tax planning is strategy. 

It’s saying, “Before December 31 hits, how are we structuring income, entities, retirement contributions, benefits, and all the levers we actually control?”

And here’s the subtle thing: a lot of CPAs are phenomenal at compliance. They’re busy. They’ve got a million returns. And if you’re only meeting them on April 12th, that tells us a lot.

So ask the question directly: “How can we have more proactive ideas to keep more of what I earn?”

Because if nobody is looking up and ahead, you’re going to stay stuck on your current rung of the ladder.

3) “Does this financial plan account for my eventual exit?”

This is the one that gets ignored the most. And it’s the one that can create the biggest regret.

For most of you in the trades, 80 to 90% of your net worth is in the business. It’s the trucks, the equipment, the people, the customer list, the brand. 

And a typical financial advisor, they focus on the 10% that’s in the market because that’s what they can see. That’s what’s on their screen.

But you’re going to exit.

That’s not to be dramatic. Even if you love your business, at some point you’ll exit because of health, energy, family, or just the season of life changing.

And if that’s true, then the personal plan has to be reverse-engineered from the business plan.

Are you selling to private equity? Are you selling to a competitor? Key employees? ESOP? Passing it to kids? And have you actually talked as a family about what you want that to look like, because there are dynamics involved in all of it. It’s unavoidable.

The BuiltWealth™ standard here is: you should be building options 3 to 5 years before the “big check” shows up. And it’s hard to make these choices in a two or three month window when someone puts a term sheet on your desk.

So ask your advisor: “Do you understand my valuation? Do you understand my exit timeline? Have we stress-tested what happens to my taxes, my investments, my insurance, my estate plan, when I sell?”

Because if they don’t understand the business, they can’t possibly build a plan that works for you.

The point of these questions

You’ve probably got great people working on your behalf.

But coordination is the multiplier.

So ask the three questions. Listen carefully to the answers.

And then, when you’re ready, join us for a JobWalk, so we can help you make sure your whole team is working together.

If you’d like to learn more about the questions we ask and our approach to quarterbacking advisory teams with BuiltWealth™, we invite you to tune into the latest Entrepreneur’s Journey podcast with Michael and Jason. Ep. 34 is available wherever you get your podcasts (or right here: https://hfmadvisors.com/builtwealth-a-framework-for-trades-business-owners/)

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HFM Investment Advisors, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. All investments involve risk and are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as a recommendation appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.