How Advisors Can Better Serve Business Owner Clients

Chances are many advisors have at least a couple of entrepreneurs and business owners on their client rosters. Some advisors even make it a point to focus on such clients, tilting their practices specifically toward entrepreneurs, founders and owners.

These clients aren’t more “special” than any other, but they do have a specific set of needs that make their relationships with advisors all the more important. Those include succession planning, business insurance, employee retirement plans and more.

Advisors can play integral roles in assisting business owners through those scenarios. Adding to the allure of catering to these clients is that they are, in many instances, friends with other business owners and this group acknowledges the desire and need to work with financial advisors. That could be a sign word of mouth advertising is at play.

Of course, advisors need to know what topics matter most to entrepreneurs and owners and those factors aren’t uniform across these groups, but there are some foundational starting points to acknowledge.

Big Issues for Small Business Owners

Focusing on small business owners simply because there are likely more of them than there are mid-sized and large-scale enterprise proprietors, a recent Nationwide survey highlights some of the issues these owners want guidance with.

Nearly three-quarters of small business owners polled by Nationwide are concerned about inflation while two-thirds are worried about rising interest rates. A nearly comparable amount are jittery about broader market turbulence and 59% expressed concern about access to capital. Fifty-five percent said they want guidance when it comes to employee benefits.

“As a trusted resource, you can bring specific knowledge, tailored resources, and added value to your clients,” notes Nationwide. “Just as you help them become confident in their personal financial future, you can also help them have confidence in the financial future of their business. Our survey findings revealed additional insights into their concerns ahead of a potential recession.”

Further cementing the notion that business owners can benefit from working with advisors, two-thirds see a recession arriving before the end of 2023 and 70% (both small and mid-sized owners) believe it will be worse than the Global Financial Crisis.

“Business owners’ widespread recessionary concerns present an opportunity for financial professionals to connect with business owners to discuss their financial plans, provide relevant context for recent market volatility, and help build confidence in the financial future of their business,” adds Nationwide. “With millions of new businesses started every year in the U.S., many business owners have not yet had to navigate a true recession, so they will be looking for professional guidance and resources.”

Tips for Working with Owners

Advisors looking to attract more entrepreneurs/owners to their practices can focus on basic issues such as reminding these clients to not let their personal finances slip while building a business, succession planning for older owners and how to access capital, if needed.

“You are in a great position to help your clients as a risk management partner and help them create a comprehensive strategy for protecting their business,” according to Nationwide. “While economic uncertainty has become the norm, it is important to remind clients that this environment won’t last forever. Help them understand how cuts today could impact their opportunity to capitalize on opportunities in the eventual post-recession environment.”

If anything, the current macroeconomic environment is the right time for advisors to engage prospective clients from the business owner community. They’re likely to remember it and value that the relationship started in uncertain times.

Related: More Proof That Gen Z & Millennials Need Advisors