At a broad level, the recent survey of tax professionals, published by the Thomson Reuters Institute, affirmed what we already knew — client advisory is a real thing.
Client advisory is not just a part of what professionals do in the tax & accounting profession, but rather it is a major expectation and need that is coming from their customers.
While that is good, the reality is that the simple realization of this key concept does not change most tax professionals’ actions. The new report, however, sheds some light on what this realization should do to influence our decisions.
The new report, Insights for Tax Professionals 2021 itself poses the question: What does success look like in our new world?
The report notes that like most other industries, the tax & accounting sector was rocked by the pandemic and ensuing lockdowns and economic crisis. The results, however, have been a mixed bag, the report suggests, noting that while immediate “survival” factors like moving to remote working and managing cash flow have been largely dealt with, much of the industry is seeking the best way forward from there.
You can download a copy of the report, Insights for Tax Professionals 2021 here.
The report notes that “a majority of tax professionals agree that tax advisors need to become more rounded business advisors,” adopting more modern ways of working as streamlined processes and automation will become “must-haves to compete effectively.”
From there, the report notes the “route to differentiation comes back to client service.”
That’s why the report clearly lays bare the disconnect between the realization of the importance of client advisory service in the industry, and the actions (or lack thereof) most tax professionals are taking to move forward on this initiative.
For example, 95% of tax professionals say that their clients want business advice from the tax advisor, yet Client Service (which includes giving better business advice) registered at just 9% among 2021 strategic priorities, cited by tax professionals. Perhaps the acknowledgement of what clients needed didn’t happen soon enough to impact folks in 2020 and how they did their work, but surely that can’t be the case for 2021?
Further, when asked about the positive impacts of the pandemic, no tax professional surveyed responded with answers around improved knowledge of clients, discovery of advisory opportunities for their customers, or deeper client relationships.
If we acknowledge that our clients are craving business advice, especially during the pandemic crisis, it appears far too few tax professionals are letting that knowledge drive a change in their day-to-day thinking or let it influence their interaction with clients. And even more responses were inwardly focused — yet it was the pandemic that accelerated the visibility for business advice from tax advisors.
Clearly, there is a gap here.
But why? While there are many answers, this survey also uncovered a critical piece of the puzzle — confidence, or the lack thereof. Only 59% of respondents classified themselves as Highly Confident in giving business advice. For firms to move forward in their advisory services, the confidence issue must be addressed, and that means examining the impact of confidence, and determining methods for growing confidence within the firm itself and within its tax advisors.
