Maybe it's time advisers got their act together – for the client's benefit

By Jon Hitchcock

A team of professional advisers is not only a luxury, but a necessity, for family businesses. As Daryn Form pointed out in "The team approach to transition" (August 2003), accountants, lawyers, insurance brokers, financial planners, bankers and family counsellors are all sorely needed to help these businesses develop plans, arrange for financing and implement their plans. No one profession has all the answers, so advisers must find a way to work together for the benefit of our common customer.

If working together is the way to go, why doesn't it happen more often? Here are some of the reasons:

• Advisers are unfamiliar with the experience and knowledge of other advisers.
Many insurance agents/brokers will say accountants often tell their clients they don't need permanent life insurance. Yet many accountants will tell you insurance agents/brokers look only for ways to sell the most expensive policy.

• Expectations are unrealistic. One example is insurance advisers looking for a close relationship that includes sharing customer lists. Many will say it is mostly a one-way street. They send customers to the accountant but the reverse seldom happens. Referrals are one thing but sharing customer names contradicts privacy obligations.

• Ego and territorial claims often cloud the picture.

• Several advisers want to be the quarterback. Recent research with family business owners suggests it is up to the business owner to decide who should co-ordinate the team of advisers.

The real benefit of cooperation lies in mobilizing the assets of multiple disciplines to deliver more value to customers.

The need is great and the impact considerable – family businesses contribute 45% of GDP and three-quarters of those businesses are facing an uncertain future without a plan.

So, how do we get past the obstacles? How do we unlock the power of specialization? How do we build a network that is more flexible and efficient than a team that works on a case, then disbands?

Based on an informal survey, most working relationships have developed over long periods of time. Most advisers have become comfortable with the others by seeing them in action first. They've developed, and gradually earned, a level of trust and comfort that includes referrals. But there isn't time to rely on this hit-and-miss method. For business owners planning to retire in the next five years, planning must start now.

The process
One of the first questions to ask is, "How do I find someone in another field who understands and has experience working with families in business?"

The current models of cooperation are of limited use. They provide only for the exchange of information related to a specific transaction. What do we need to execute an estate freeze? What legal documents are required to achieve this corporate reorganization? How much insurance do we need to fund the estate plan? This level of sharing accomplishes a specific objective but restrains the network from any learning opportunities. While customer privacy must remain paramount, professionals need to share a far greater quantity and quality of information to meet our common clients' needs.

To build a more flexible, efficient network, I think we need to borrow a model inspired by the use of the Internet and related technology. This model, which is currently used by several global organizations, is a loosely linked network of specialists driven by a process to achieve specific objectives. The network may well have a different membership for each situation.

This loosely linked network is more likely to innovate, especially when the process is focused on the desired outcomes rather than the way the job gets done.

Building the network
Two elements are needed to build such a network:

1. A 'process orchestrator' – a conductor rather than a quarterback. The role includes recruiting network partners, defining communication standards and creating a tailored process to meet customer needs. Most important, the conductor must develop a feedback system to facilitate continuous learning and network improvement.

2. Members who are adept at community building, collecting and sharing information and setting business standards. This requires a significant shift in mindset from our existing business models. If you already have a case-specific working relationship with other professionals, what are you doing to evolve it into a network that learns and innovates for the benefit of its customers? Think of the added value such a network brings to the problem of family business succession and transition.

We are often frustrated by clients who don't act on our recommendations. But the frustration may be mutual. I've heard the phrase "succession task force" and a suggestion to "put all the advisers in a room and don't let them out until they've come up with a complete business succession plan that works for everyone." Maybe they're trying to tell us to get our act together.

Jon Hitchcock (jon.hitchcock@sunlife.com) is director of Affluent Insurance Market Development with Sun Life Financial in Toronto.