Client Advisory Boards: Why Now Is The Right Time To Use This Invaluable Tool For Your Firm

Excerpted from the July 2009 issue of INSIDE Public Accounting

When Anderson ZurMuehlen shareholder Mike Tobiason was summoned to Missoula, Mont., in 2005 to put the firm’s flag on two new acquisitions, he knew he had to do more than simply introduce himself to his charges.

As a shareholder in AZ’s Billings, Mont., office, Tobiason saw the acquisition of longtime Missoula firms McElroy, Smart & Wilson and Elmore & Associates as an opportunity to create an advisory board to start an ongoing dialogue with clients and other community members.

“The shareholders of the Missoula office, who had lived and worked in that marketplace for a number of years, were asked to provide a list of recommended board members,” Tobiason says. “From the list of recommended members, we sought to include clients, prospective clients, community organization leaders, education leaders, attorneys and bankers.”

The board would never have more than seven members at a time, with each member serving a two-year term. Tobiason facilitated meetings with the board an average of five times per year. He started the process in January of 2006 and plans to appoint a new board later this year to gauge the effects of the deep economic recession on the community.

“Because we were a new office and new to the market, a majority of our early meetings were spent educating the board members about who we were as an office and a firm,” Tobiason tells IPA. “Through this process we came to understand what the demands of the marketplace were, what the expectations of the consumer base were, as well as the labor supply and the strengths and weaknesses of the competition.

“The input and feedback we obtained from our board afforded us the opportunity to review our service delivery, better understand the marketplace expectations of advisory services and improve our market recognition.” He adds that feedback gleaned from the board also helped in recruiting.

While Tobiason doesn’t like to call what he formed a traditional “client” advisory board, he does admit that some of the goals were the same. “The advisory board was used more to gain market intelligence, gain name recognition in the community and gain insights into prospective clients,” he says.

Firms have been using such boards for the last two decades to help give them strategic direction, new service ideas and keep them in touch with clients. Shannon Vincent, co-founder and CEO of ReNew Group, a web-based client intelligence solution provider, considers a client advisory board to be a “feedback loop” on current and potential services that firms provide.

Vincent, a CPA who has facilitated such board meetings since 1996, believes the busy nature of accountants and many of their small business clients doesn’t allow for many opportunities for direct communication. “All the clients of firms don’t know all the services a firm offers,” he says. “When you get a group of clients in a room and you ask them what services the firm offers, you get ABC company saying, ‘Wow, they do that for you? We want them to do that for us’.”

Such services include producing tax returns within a certain period of time, providing strategic business consulting services and suggesting referrals to finance sources. For the firms, it is important they take action following the meetings. (Typically, Vincent’s clients will hire his firm for one off-site annual meeting with anywhere from six to 10 members getting together.)

The use of client advisory boards, especially during a recession, is critical in strategic and operational planning, according to Vincent and Tobiason. “Now more than ever, it’s critical for firms to be talking to their clients,” Vincent tells IPA. “CPAs can help clients tap into their banking relationships. They can provide a referral network of financial advisers, bankers and estate planning.”

As a CPA in today’s financially troubled marketplace, Tobiason knows firsthand how the recession can affect client relationships. “A lot of firms have been cutting back,” he says. “We are focusing on what the marketplace is expecting. We want to give clients the right level of service and let them know it’s not all about price.”

The trick to setting up such boards is getting buy-in from all the partners and having a point person handle the logistics. “You need to seek input from internal people [at the firm] as to who should be on the board,” Tobiason says. The firm then needs to interview potential candidates.

“We told our potential board members that it was a privilege to serve,” he says. “We told them if [you] can’t attend, we don’t want you. We had to get their buy-in.” Additionally, Tobiason’s firm asked board members to choose a charity to which AZ would donate $150 for each meeting they attended.

Vincent’s third-party facilitator firm opted for giving clients a free meal at a local country club and the opportunity to give their direct feedback. Firms need quite a bit of lead time to put together such a board. In addition to asking the partners why they are creating such a board, they need to define whether its mission is strategic, operational or just for general feedback, Vincent says. Then, the firm needs to hire a facilitator to help send out introduction letters to prospective members that specify the parameters of the board. The meeting should be at a place conducive to open dialogue.

It’s important to record the clients’ statements at these meetings, so the firm comes out with action steps. “If clients want their input to be confidential, then we stop the tape,” Vincent says.

Tobiason’s firm had a kick-off event with its chairman and CEO present, although they would not be attending the actual meetings.


PRE-MEETING: Determine desired outcome; Determine purpose – strategic/operational; Determine participants – clients, prospects, referral sources; Determine facilitator; Send participants invite letter; Call participants; Confirm attendance; Send thank you letters and a gift; Communicate outcome/action steps; Implement

MEETING QUESTIONS: The board’s purpose; Review the past, act as an advisory board and help grow the firm; Who’s in the room?; Who you are, what do you do, why did you choose the firm, how long have you been a client?

REVIEWING THE PAST: How many times a year do you meet with the firm? How is that contact handled? What services do you use and how frequently? Do you believe you know all of the services our firm can provide? What do they do to ensure all of your needs are covered?