Benchmarking D.I.Y. – Evaluating Financial Partners

Benchmarking D.I.Y. – Evaluating Financial Partners

Our financial partners are a lot like the starting lineup of a sports team; the goal is to assemble the strongest group possible to enhance the overall performance of the company or portfolio. From banks, to advisors, accountants, lenders, and much more, smart capitalists strive to align themselves with the experts and organizations that can take their finances further.

Any good coach will tell you, though, managing a team requires frequent assessment and reevaluation. A lot changes over time, and what was once a star player might not be so effective as markets evolve and business climates shift. But how can this be measured?

Coaches have clear-cut data in the form of player stats to use when making their considerations – business owners and entrepreneurs, not so much. They need to do their own benchmarking. Fortunately though, it really boils down to simply asking yourself targeted review questions as you interact with your partners and track your specific goals. Let’s dive in and learn what kinds of questions you should be asking.


Wealth Advisors – Focus on Service over Portfolio Performance

Mark Chamberlain

Mark Chamberlain

Are you getting the kind of service your account deserves? If not, walk away. The success of any financial endeavor depends greatly on an organization’s ability to meet your specific personal or business needs.

“By and large, business owners need to be satisfied with the level of service they’re receiving from their advisors and other financial organizations. That’s the first thing they should be evaluating – are they happy with the service they’re receiving?” said Mark Chamberlain, CEO of Lakeside Wealth Management Group, LLC. “It’s really an underestimated skillset from Indiana. Many people think they might need to go to the Chicago area to receive the best help for their financial problems, but truly our firms are just as capable as any. The financial community has been working together to change the optics of our area by forming relationships built on trust among the individuals we serve.”

Speaking about evaluating wealth advisors as a specific example, Chamberlain said most people would consider how well their investment portfolio performs as the obvious metric to use, but wealth advisors can’t control the market. Instead, companies should be looking at several items about the service they’re receiving:

  • Are you paying fees or commissions?
  • How transparent is your wealth advisory firm being?
  • Are you working with fiduciary advisors?


Accountants – Are Your Needs Being Met?

Gregory R. Ward

Gregory R. Ward

Depending on the needs of your company, it’s essential your accountant’s skillsets align with those needs. For example, some companies may only interact with their accountant during tax season, while others may be interacting with them on a daily basis as a trusted business advisor. In today’s industry, there is also a wide range of specialists within accounting that are able to serve very specific functions. Therefore, it’s important to establish expectations from the start and revisit them periodically to make sure your accounting professional is a good match for your company’s needs.

Gregory R. Ward, a CPA/ABV and principal with Swartz, Retson & Co., P.C., said, “It is important for the accountant to have appropriate experience. For example, if the business is a construction company or a nonprofit agency, they should get assistance from a professional that understands that industry. The accounting profession has become very specialized and it is becoming increasingly difficult to be a generalist. We serve our clients using a team approach, so business owners get help from professionals with the right backgrounds.”

As for some tips as to how business owners can benchmark their accounting professionals, Ward suggested owners consider things like timeliness, response time, and service.

“It comes down to the accountant meeting the business owner’s expectations and treating them with respect,” he said. “If the accountant stated they would provide a report within two weeks, did they? If not, hopefully they communicated in advance that they may need additional time. Another good metric is how quickly the accountant responds to phone calls and e-mail messages. Responding within a day is a good rule of thumb.”

Business owners should also be asking:

  • Is our accountant the right kind of accountant for our company? What’s their specialty?
  • Are they organized, detailed, and thorough in their work?
  • Do they understand our company and what we do?


Lenders – Focus on Effort, Earnestness, and Their Interest in Your Plans

Erica Dombey

Erica Dombey

One might presume you couldn’t evaluate your lender in the same way you could your more routine partners, but that’s not the case. To equip your company for all the forms of growth that could come your way, you’ll need a lending partner that works on your behalf and believes in your goals. Whether it’s a bank or a different kind of lender, there are several important qualities you should be seeking.

Erica Dombey, president and executive director of the Regional Development Company, a firm that specializes in helping companies secure SBA 504 loan funding, commented on the importance of earnestness in your lenders. They should be acting as advocates on your behalf, working for you, and understanding what your company does.

“I would look for responsiveness first,” Dombey said. “Do they call you back right away? Do they visit your place of business rather than making you come to their office? How long do requests and loan approvals take to turn around?”

“I’d also look to their interest level in your business,” she added. “Have they been there? Do they seem to understand your industry? Do they show an interest in what you do?”

Dombey also commented your lending institution should want to engage with your company across all of your business needs, not simply just lending, and should be maintaining a high degree of service with each interaction.

“Service is another important factor,” she said. “Have they offered all the products that are available? Have they discussed checking, credit cards, lending, cash management, employee retirement plans, direct deposit, etc.? They should try to get all of your business. If you come to them with a problem or even complain about something, do they offer up solutions? If they make a mistake, how long does it take to resolve it?”

Borrowers should be asking:

  • Are my lenders making themselves available to answer my questions?
  • Do they understand our unique needs and the goals we’re working towards?
  • Have they offered suggestions to help us reach our goals?


Red Flags – What to Keep an Eye On

Protecting oneself and your livelihood should always be a priority particularly when it comes to your finances, but it’s not always easy to identify suspicious or shady behavior if you’re not sure what it looks like. So, we asked our experts to describe some possible red flags we should know to help keep us better prepared. Interestingly, they mentioned a lack of certain characteristics can be very telling.

“You could consider it a red flag if your financial partner lacks referral sources or a strong network of other peer organizations; it could be a sign that something’s not right,” Chamberlain said. “It’s our responsibility to be defenders of our community, and when an entity in our community is acting unethically, it impacts business for us all. So, even among local competitors there’s good reason to maintain accountability and ethical standards.”

Dombey mentioned community involvement, or lack thereof, can be very revealing about our financial partners. Their organizational structure and employee retention can be as well.

“On the bigger scale, look for an organization that gives back to the community,” she said. “Pay attention to the causes they donate to. Do their employees show leadership on nonprofit boards? What is their reputation in the community? How is their employee turnover? (If they have a new lender or branch manager every few months, that’s a bad sign).”

As for accountants, Ward said business owners should keep an eye on several organizational and competency characteristics.

“Business owners should be cautious of accountants that constantly make excuses, are slow to respond, and provide sloppy work,” Ward said. “Another red flag is accountants that won’t stand behind their work product. Anyone can have an off day, but for business owners continually not getting their expectations met, it may be time to find another professional.”


Build the Best Team Possible

Using all of the questions and ideas above as a guide for how to gauge the performance of your financial partners, you can begin to build the best team possible to serve the needs of your company and more. The biggest question you should probably be asking yourself is, “Am I getting the most out of my team?” If the answer is anything less than a definitive yes, then you should be digging a little deeper into each relationship to find areas that need improvement and refinement. Doing so could take your company higher in the brackets than you ever thought possible.

Category Cover Story, Features