How to become a trusted advisor

PETER GALLANAGH* praises one bank manager’s “sheer determination, understanding and belief in our client’s business” which made him a model to follow.

Despite the signs of economic ‘green shoots’, many bankers still seem reticent about going out to the coal-face to ‘do business’. This is no way to take the bold steps into our ‘new banking world’.

Bankers need to develop relationships with their customers and move away for a ‘pure banking’ role built solely on price. That has no depth and, whilst I fully appreciate the need for covenants and monitoring together with robust, timely management of information, what’s really needed is a Trusted Advisor role based on a banker’s full understanding of the client’s needs and the environment in which they operate.

Here’s an example of what I mean. Following the demise of the house building market, a business client of mine moved into contracting. In its first year, the contracting business turned over £1m, in the second year £5m, and this year could do £10m. The margin has improved, and my client now sits on the design team of one of its blue chip clients for a development which will provide work for at least four years with guaranteed margins.

The change in market and lack of housing development generated the need for additional funding. Armed with quality monthly management information and weekly, monthly, and quarterly rolling cashflows, we approached the bank but were continually rebuffed.

It wasn’t until the bank manager changed that action actually took place. The new manager, with significant sector knowledge, visited sites, spoke to employees and spent time with ourselves and our client examining various funding options. After some weeks, he submitted a credit paper but was rebuffed on certain points.

Unlike many who would have accepted this, our banker spent time with the credit staff and, over many weeks, fought our client’s battle. An increased personal guarantee was agreed – a solution achieved only by that banker’s sheer determination, understanding and belief in our client’s business.

That banker is now a Trusted Advisor to my client and myself. I’d have no hesitation in seeking his valued advice and support. But that doesn’t happen overnight. The position needs to be earned and this takes the investment of time and effort.

To become the Trusted Advisor, you must show competence and, more importantly, must give advice outside your own specialism, demonstrating knowledge of business in general and an understanding of the key issues in your client’s sector. Always be honest about what you can or cannot do and take a long-term perspective rather than seeing the short-term prospect.

The business benefits are obvious. As the first port of call for your clients, you’re in the perfect position to influence the direction your client is going – and you’ll also flourish from this.

So, in short, don’t worry about what has gone before. Get out there and spend time with your clients, understand what they’re seeking to achieve. Invest time with them. Keep your network active by putting clients together who can assist each other. Help them produce accurate, relevant, timely data. Provide quality advice, or introduce them to people who can. Become the Trusted Advisor, you’ll never look back!

*Sponsored article
Campbell Dallas LLP is a leading independent firm of Chartered Accountants in Scotland. The firm is the Scottish associate of UHY International.
For more information or advice please contact Peter Gallanagh on 0141 887 4141 or email Peter.Gallanagh@campbelldallas.co.uk
Offices: Aberdeen | Bearsden | Paisley | Perth | Stirling
www.campbelldallas.co.uk

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